PHYH spins off Phyhealth Corporation

Physicians Healthcare Management Group, Inc. ("PHYH") (Pink Sheets: PHYH), today announced that it is spinning off its wholly-owned subsidiary, Phyhealth Corporation ("Phyhealth"). Phyhealth will assume substantially all the businesses, assets and liabilities of PHYH at the time of, or prior to, the spin-off.

Effective on the date the associated Form S-1 Registration Statement is declared effective by the SEC (the "spin-off date"), Phyhealth will concurrently issue an additional 3,471,713 shares of common stock to PHYH, and all PHYH's common and preferred shareholders as of December 8, 2009 will receive 1 share of Phyhealth for every 50 shares (or their equivalent) of PHYH held. As a result, Phyhealth expects to issue 3,118,510 common shares, 3,240,000 Series A Preferred Convertible Shares and 622,324 Series B Preferred Convertible Shares to the PHYH shareholders on a prorata basis.

Following the registered spin-off, each of Phyhealth and PHYH will be independent, publicly-traded companies, and Phyhealth plans to conduct a registered public offering of up to $10 million. PHYH expects that its common stock will continue to be listed on the Pink Sheets as "PHYH" and Phyhealth common stock is expected to qualify for and be traded on the Over-the-Counter Bulletin Board under a symbol yet to be determined.

Mr. Robert Trinka, chairman and chief executive officer, stated, "We believe this spin-off will accelerate our plans to list on the OTC Bulletin Board and provide us a better platform to raise growth capital. At the same time, we believe this structure fully protects the interests of all our shareholders."