Business update from Physicians Healthcare Management Group

Oct 14 2009

Physicians Healthcare Management Group, Inc. (Phyhealth) (Pink Sheets: PHYH), a developer of health maintenance organizations (HMOs) in partnership with physicians and manager of Physhield Insurance Exchange (Physhield), a licensed medical malpractice insurer, today announced that it has issued its financial statements for the six months ended June 30, 2009. The financials are being posted today on the Pink Sheets (www.pinksheets.com).

Mr. Robert Trinka, chairman and chief executive officer, stated, "We are extremely pleased with the progress we have made year-to-date. In particular, we are gearing up our medical malpractice insurance affiliate, Physhield Insurance Exchange, a Risk Retention Group, following our decision earlier this year to increase our ownership in Phyhealth Underwriters, Inc. from 50% to 92.5%. Phyhealth Underwriters is the attorney-in-fact and has a long-term agreement to manage the operations of Physhield. Phyhealth Underwriters derives its revenue as a percentage of the medical malpractice premiums written by Physhield."

"Most recently, we engaged sales agents to offer the Physhield product to physicians in Florida, after which we plan to aggressively expand our efforts along the east coast, and eventually across the US. Our goal for Physhield is to bring power and control back to physicians by enabling them to better manage their medical malpractice insurance program and ultimately make decisions in the best interests of their patients and themselves."

"At the end of the second quarter, we had approximately $1 million in cash and certificates of deposit, $3.4 million of assets, and no long-term debt. We believe our strong balance sheet provides us a solid foundation for growth, and we anticipate Physhield will begin to generate meaningful revenues by the first quarter of 2010. At the same time, we remain committed to developing health maintenance organizations in partnership with physicians. We are watchful of opportunities that may arise from the current administration's plans for changes in the healthcare insurance marketplace and expect our community health plan model will continue to play an important role in the healthcare arena regardless of the reforms that are finally enacted."

The company also reported that it is moving forward with its plans to file an S-1 registration with the SEC and a Form 211 with FINRA to make Phyhealth a fully reporting Company traded on the OTC Bulletin Board.

SOURCE Physicians Healthcare Management Group, Inc.