UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2003
[ ] 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 0-28456
METROPOLITAN HEALTH NETWORKS, INC.
(Exact name of registrant as specified in its charter)
Florida
65-0635748
(State or other jurisdiction of
(I.R.S. Employer
Incorporation or organization)
Identification No.)
250 Australian Avenue/Suite 400, West Palm Beach, Fl.
33401
(Address of principal executive office)
(Zip Code)
(561) 805-8500
(Registrant’s telephone number, including area code)
Indicate by check mark whether the registrant
(1) 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 (2) 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 practicable date.
Class
Outstanding as of September 30, 2003
Common Stock par value $.001
35,491,423
#
Metropolitan Health Networks, Inc.
Index
Part I. | FINANCIAL INFORMATION | Page |
Item 1. | Condensed Consolidated Financial Statements (Unaudited): | |
Condensed Consolidated Balance Sheets | ||
as of September 30, 2003 and December 31, 2002 | 3 | |
Condensed Consolidated Statements of | ||
Operations for the Three and Nine Months | ||
Ended September 30, 2003 and 2002 | 4 | |
Condensed Consolidated Statements of | ||
Cash Flows for the Nine Months Ended | ||
September 30, 2003 and 2002 | 5 | |
Notes to Condensed Consolidated | ||
Financial Statements | 6-13 | |
Item 2. | Management’s Discussion and Analysis of | |
Financial Condition and Results of | ||
Operations | 14-19 | |
Item 3. | Quantitative and Qualitative Disclosures About Market Risk | 20 |
Item 4. | Controls and Procedures | 21 |
PART II. | OTHER INFORMATION | |
Summary of Legal Proceedings | 21 | |
Changes in Securities and Use of Proceeds | 21 | |
Default Upon Senior Securities | 21 | |
Submission of Matters to a Vote of Security | ||
Holders | 21 | |
Other Information | 21 | |
Forward Looking Statements and | ||
Associated Risks | 21 | |
SIGNATURES | 22 | |
CERTIFICATIONS | 23-26 | |
#
METROPOLITAN HEALTH NETWORKS, INC. AND SUBSIDIARIES | |||||
CONDENSED CONSOLIDATED BALANCE SHEETS | |||||
SEPTEMBER 30, 2003 AND DECEMBER 31, 2002 | |||||
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September 30, 2003 | December 31, 2002 | ||||
ASSETS | (Unaudited) | (Audited) | |||
CURRENT ASSETS | |||||
Cash and equivalents | $ 273,020 | $ 399,614 | |||
Accounts receivable, net of allowances | 1,632,021 | 1,651,340 | |||
Inventory | 240,037 | 158,714 | |||
Other current assets | 1,023,183 | 443,896 | |||
Assets held for sale | 3,536,830 | 3,303,599 | |||
TOTAL CURRENT ASSETS | 6,705,091 | 5,957,163 | |||
CERTIFICATES OF DEPOSIT - restricted | 950,000 | 850,000 | |||
CERTIFICATES OF DEPOSIT RECEIVABLE - restricted | 50,000 | 150,000 | |||
PROPERTY AND EQUIPMENT, net | 720,751 | 883,763 | |||
GOODWILL, net | 1,992,133 | 1,992,133 | |||
OTHER ASSETS | 177,032 | 325,852 | |||
TOTAL ASSETS | $ 10,595,007 | $ 10,158,911 | |||
LIABILITIES AND DEFICIENCY IN ASSETS | |||||
CURRENT LIABILITIES | |||||
Advances from HMO | $ 263,053 | $ 1,666,953 | |||
Accounts payable | 3,118,795 | 3,774,778 | |||
Accrued expenses | 779,412 | 1,420,977 | |||
Current maturities of capital lease obligations | 124,993 | 126,220 | |||
Current maturities of long-term debt | 4,386,866 | 2,234,521 | |||
Payroll taxes payable | 4,069,252 | 3,805,598 | |||
Liabilities related to assets held for sale | 1,065,466 | 755,528 | |||
TOTAL CURRENT LIABILITIES | 13,807,837 | 13,784,575 | |||
CAPITAL LEASE OBLIGATIONS | 13,072 | 122,416 | |||
LONG-TERM DEBT | - | 3,120,213 | |||
COMMITMENTS AND CONTINGENCIES | |||||
DEFICIENCY IN ASSETS | |||||
Preferred stock, par value $.001 per share; stated value $100 per share; | |||||
10,000,000 shares authorized; 5,000 issued and outstanding | 500,000 | 500,000 | |||
Common stock, par value $.001 per share; 80,000,000 shares authorized; | |||||
35,491,423 and 31,376,822 issued and outstanding, respectively | 35,491 | 31,376 | |||
Additional paid-in capital | 30,250,578 | 29,660,886 | |||
Accumulated deficit | (33,803,723) | (36,640,086) | |||
Common stock issued for services to be rendered | (208,248) | (420,469) | |||
TOTAL DEFICIENCY IN ASSETS | (3,225,902) | (6,868,293) | |||
TOTAL LIABILITIES AND DEFICIENCY IN ASSETS | $ 10,595,007 | $ 10,158,911 | |||
See accompanying notes - unaudited | |||||
METROPOLITAN HEALTH NETWORKS, INC. AND SUBSIDIARIES | |||||||||
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | |||||||||
FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2003 AND 2002 | |||||||||
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Nine Months Ended | Three Months Ended | ||||||||
September 30 | September 30 | ||||||||
2003 | 2002 | 2003 | 2002 | ||||||
(Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | ||||||
REVENUES | $ 108,422,050 | $ 105,225,484 | $ 35,680,129 | $ 34,613,150 | |||||
EXPENSES | |||||||||
Direct medical costs | 91,802,409 | 91,889,680 | 29,994,259 | 30,135,952 | |||||
Payroll, payroll taxes and benefits | 5,516,682 | 5,827,112 | 1,803,664 | 1,832,792 | |||||
Medical supplies | 1,477,089 | 1,414,464 | 585,689 | 643,798 | |||||
Depreciation and amortization | 517,176 | 753,093 | 176,549 | 250,113 | |||||
Consulting expense | 1,053,648 | 1,904,978 | 328,813 | 575,677 | |||||
General and administrative | 2,803,789 | 3,032,140 | 839,226 | 1,107,640 | |||||
TOTAL EXPENSES | 103,170,793 | 104,821,467 | 33,728,200 | 34,545,972 | |||||
INCOME/(LOSS) BEFORE OTHER INCOME (EXPENSE) | 5,251,257 | 404,017 | 1,951,929 | 67,178 | |||||
OTHER INCOME (EXPENSE): | |||||||||
Interest and penalty expense | (1,007,173) | (1,664,498) | (279,879) | (387,605) | |||||
Other income | 61,456 | &n | |||||||