-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, C4eOC3rFhMLzIg0/j9uXo+vhQmNIE+YP+zTaqDxMPMGw40XCatxqVqhtaRO4Owwq 5vDuCJgOarReirCYDH6mUw== 0000950168-96-000792.txt : 19960514 0000950168-96-000792.hdr.sgml : 19960514 ACCESSION NUMBER: 0000950168-96-000792 CONFORMED SUBMISSION TYPE: 8-K/A PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19960229 ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 19960513 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: UCI MEDICAL AFFILIATES INC CENTRAL INDEX KEY: 0000737561 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-SPECIALTY OUTPATIENT FACILITIES, NEC [8093] IRS NUMBER: 592225346 STATE OF INCORPORATION: DE FISCAL YEAR END: 0930 FILING VALUES: FORM TYPE: 8-K/A SEC ACT: 1934 Act SEC FILE NUMBER: 000-13265 FILM NUMBER: 96561416 BUSINESS ADDRESS: STREET 1: 6168 ST ANDREWS RD CITY: COLUMBIA STATE: SC ZIP: 29212 BUSINESS PHONE: 8037728840 MAIL ADDRESS: STREET 1: 6168 ST ANDREWS ROAD CITY: COLUMBIA STATE: SC ZIP: 29212 8-K/A 1 UCI MEDICAL AFFILIATES 8-K/A #43463.1 UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 8-K/A CURRENT REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of earliest event reported: February 29, 1996 UCI Medical Affiliates, Inc. (Exact name of registrant as specified in its charter)
Delaware 0-13265 59-2225346 (State or other jurisdiction of incorporation) (Commission File Number) (IRS Employer Identification No.)
6168 St. Andrews Road, Columbia, South Carolina 29212 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (803) 772-8840 No Change (Former name or former address, if changed since last report.) This document contains a total of 40 pages. 1 This Form 8-K/A amends the Form 8-K filed with the Securities and Exchange Commission on March 14, 1996 by UCI Medical Affiliates, Inc., a Delaware corporation (the "Company"), and is filed to include the financial statements required by Item 7 of Form 8-K. ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS a) Financial Statements of Business Acquired The financial statements for Convenience Medical Services, P.A., the business acquired by the wholly-owned subsidiary of the Company, are included in this report beginning on page number 3. The financial statements for Carolina Examination Services, Inc., the business acquired by the wholly-owned subsidiary of the Company, are included in this report beginning on page number 23. b) Pro Forma Financial Information The pro forma financial information for Convenience Medical Services, P.A., the business acquired by the wholly-owned subsidiary of the Company, is included in this report following the financial information included herein in response to Item 7(a) above. The pro forma financial information for Carolina Examination Services, Inc., the business acquired by the wholly-owned subsidiary of the Company, is included in this report following the financial information included herein in response to Item 7(a) above. c) Exhibits Each of the following exhibits is incorporated by reference to the exhibit of the same number filed with the Company's Form 8-K filed on March 14, 1996. Exhibit 2.1 - Asset Purchase Agreement dated and executed on February 29, 1996 by and between Carolina Examination Services, Inc. and UCI Medical Affiliates of South Carolina, Inc. Exhibit 2.2 - Asset Purchase Agreement dated and executed on March 1, 1996 by and between Convenience Medical Services, P.A. and UCI Medical Affiliates of South Carolina, Inc. 2 Financial Statements of Convenience Medical Services, P.A. and Stephen A. Harvey, M.D. as of December 31, 1995 and 1994 3 UCI Medical Affiliates, Inc. CONTENTS
Page Financial Statements of Convenience Medical Services, P.A. as of December 31, 1995 and Stephen A. Harvey, M.D. as of December 31, 1994...................................................................................6-14 UCI Medical Affiliates, Inc. Pro Forma Combining Financial Statements Combining Balance Sheet at September 30, 1995................................................... 15 Notes to Combining Balance Sheet................................................................ 16 Combining Statement of Operations and Accumulated Deficit for year ended September 30, 1995............................................................ 17 Notes to Combining Statement of Operations...................................................... 18 UCI Medical Affiliates, Inc. Pro Forma Combining Financial Statements Combining Balance Sheet at March 31, 1996....................................................... 19 Notes to Combining Balance Sheet................................................................ 20 Combining Statement of Operations and Accumulated Deficit for the six months ended March 31, 1996.................................................... 21 Notes to Combining Statement of Operations...................................................... 22
4 Report of Independent Accountants Board of Directors UCI Medical Affiliates, Inc. We have audited the accompanying balance sheets of Convenience Medical Services, P.A. as of December 31, 1995 and Stephen A. Harvey, M.D. as of December 31, 1994 and the related statements of operations, changes in owner's equity, and cash flows for the periods then ended. These financial statements are the responsibility of management. Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Convenience Medical Services, P.A. as of December 31, 1995 and Stephen A. Harvey, M.D. as of December 31, 1994, and the results of operations and cash flows for the periods then ended in conformity with generally accepted accounting principles. The financial statements have been prepared solely from the accounts of Convenience Medical Services, P.A. and do not include the personal accounts of the stockholder or those of any other operations in which he may be engaged. THE SIGNED ORIGINAL OPINION LETTER IS ON FILE WITH UCI MEDICAL AFFILIATES, INC. Columbia, South Carolina April 18, 1996 5 Convenience Medical Services, P.A. Stephen A. Harvey, M.D. Balance Sheets December 31, 1995 1994 -------- -------- ASSETS Current assets: Cash and cash equivalents $ 1,521 $ 10,008 Accounts receivable, net 114,421 94,195 Prepaid expenses 55,528 -- -------- -------- Total current assets 171,470 104,203 Office and equipment, net 132,160 48,070 Goodwill, net 103,155 110,844 Other assets, advances to owner 1,351 10,000 -------- -------- 236,666 168,914 -------- -------- Total assets $408,136 $273,117 ======== ======== LIABILITIES AND EQUITY Current liabilities: Accounts payable and accrued expenses $ 38,730 $ 28,070 Promissory note payable on demand 30,000 -- Current portion of long-term debt 29,148 40,873 Current portion of capital lease obligations 35,595 3,820 -------- -------- Total current liabilities 133,473 72,763 Capital lease obligations 125,303 9,780 Long-term debt 76,178 105,030 -------- -------- Total liabilities 334,954 187,573 -------- -------- Equity Capital stock, no par value, 1,000 shares authorized; 100 shares issued and outstanding 100 -- Retained earnings 73,082 -- Proprietor's equity -- 85,544 -------- -------- Equity 73,182 85,544 -------- -------- Total liabilities and stockholder's equity $408,136 $273,117 ======== ======== The accompanying notes are an integral part of these financial statements. 6 Convenience Medical Services, P.A. Stephen A. Harvey, M.D. Statements of Operations for the year ended December 31, 1995 and the seven months ended December 31, 1994
1995 1994 ------------------ ------------------ Net medical revenue $ 832,229 $ 390,505 Operating costs 770,029 279,295 ------------------ ------------------ Operating margin 62,200 111,210 General and administrative expenses 31,786 13,337 Depreciation and amortization 31,768 8,315 ------------------ ------------------ Income (loss) from operations (1,354) 89,558 Interest expense, net 11,008 4,014 ------------------ ------------------ Net income (loss) $ (12,362) $ 85,544 ================== ==================
The accompanying notes are an integral part of these financial statements. 7 Convenience Medical Services, P.A. Stephen A. Harvey, M.D. Statements of Changes in Equity for the year ended December 31, 1995 and the seven months ended December 31, 1994
Common Stock Retained Proprietor's Earnings Equity Total ----------------- ----------------- ----------------- ----------------- June 1, 1994 $-- $ -- $ -- $ -- Net income -- -- 85,544 85,544 ----------------- ----------------- ----------------- ----------------- Balance, December 31, 1994 -- -- 85,544 85,544 Restructure to new form of ownership, January 1, 1995 100 85,444 (85,544) -- Net Loss -- (12,362) -- (12,362) ----------------- ----------------- ----------------- ----------------- Balance, December 31, 1995 $ 100 $ 73,082 -- $ 73,182 ================= ================= ================= =================
The accompanying notes are an integral part of these financial statements. 8 Convenience Medical Services, P.A. Stephen A. Harvey, M.D. Statements of Cash Flows for the year ended December 31, 1995 and the seven months ended December 31, 1994
1995 1994 ------------------ ------------------ OPERATING ACTIVITIES: Net income (loss) $ (12,362) $ 85,544 Adjustments to reconcile net income to cash provided by operating activities: Depreciation and amortization 31,768 8,315 Changes in operating assets and liabilities: Accounts receivable (20,226) (94,195) Prepaid expenses 12,152 Other assets, shareholder advances 8,649 (10,000) Accounts payable and accrued expenses 10,660 28,070 ------------------ ------------------ Cash provided by operating activities 30,641 17,734 INVESTING ACTIVITIES: Purchases of property and equipment, net -- (1,900) ------------------ ------------------ Cash used by investing activities -- (1,900) FINANCING ACTIVITIES: Borrowings under demand note payable 30,000 -- Repayments of long-term debt (40,577) (4,097) Payments on capital lease obligations (28,551) (1,729) ------------------ ------------------ Cash used in financing activities (39,128) (5,826) Net increase (decrease) in cash and cash equivalents (8,487) 10,008 Cash and cash equivalents, beginning of period 10,008 -- ------------------ ------------------ Cash and cash equivalents, end of period $ 1,521 $ 10,008 ================== ================== Supplemental cash flow information: Cash paid for interest $ 11,008 $ 4,014 ================== ==================
The accompanying notes are an integral part of these financial statements. 9 CONVENIENCE MEDICAL SERVICES, P.A. STEPHEN A. HARVEY, M.D. NOTES TO FINANCIAL STATEMENTS 1. SIGNIFICANT ACCOUNTING POLICIES ORGANIZATION Stephen A. Harvey, M.D. is the sole stockholder of Convenience Medical Services, P.A. ("CMS") located in North Myrtle Beach, South Carolina. Dr. Harvey operates a family practice medical office that provides treatments on an outpatient basis for medical conditions not involving an immediate threat to life. The practice commenced operations on June 1, 1994 under the name Stephen A. Harvey, M. D. CMS was organized effective January 1, 1995. The accompanying financial statements represent the financial activities of the practice for the periods indicated. The financial statements have been prepared solely from the accounts of CMS and do not include the personal accounts of Stephen A. Harvey, M.D. or those of any other activities in which he may be engaged. Management makes estimates that are a necessary part of the preparation of financial statements. These estimates include the useful lives of equipment, some of which is subject to technological obsolescence, and the net realizable value of patient accounts receivable. At December 31, 1995, management is not aware of any conditions that could significantly affect the estimates employed in the preparation of the financial statements. ACCOUNTS RECEIVABLE Accounts receivable represent amounts due from patients, employers and various third-party payors. Provisions for uncollectable amounts are made based on management's estimates of future collectibility and historical payment percentages. PREPAID EXPENSES Certain noncancelable leases include provision for the purchase of maintenance service and chemical reagents. Prepaid expenses represent CMS's unconditional obligation to purchase these services and supplies and are being charged to operations ratably over the term of the lease. OFFICE AND EQUIPMENT Office and equipment is reported at cost. Depreciation for financial reporting purposes is computed principally by the straight-line method over the estimated useful lives of the assets, ranging from five to seven years. Maintenance, repairs and minor renewals are charged to expense. Major renewals or betterments, which prolong the life of the assets, are capitalized. Upon disposal of depreciable property, the asset accounts are reduced by the related cost and accumulated depreciation. The resulting gains and losses are reflected in the statements of operations. 10 Convenience Medical Services, P.A. Stephen A. Harvey, M.D. Notes to Financial Statements 1. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) GOODWILL On June 1, 1994, Stephen A. Harvey, M.D. acquired the medical equipment and substantially all of the tangible personal property and intangible assets of an existing medical practice. The excess of the purchase price of $150,000 over the fair value of assets acquired and liabilities assumed was $115,329 and is being amortized over fifteen years using the straight-line method. Amortization of goodwill is included in the statement of operations under the caption depreciation and amortization and was $7,688 for the year ended December 31, 1995 and $4,484 for the period ended December 31, 1994. INCOME TAXES As provided by the Internal Revenue Code, CMS has elected S Corporation status. Under this election, net income from CMS is reported in the stockholder's individual federal and state income tax returns along with the stockholder's other items of income and expense for the period. CMS is not a taxpaying entity for purposes of federal and state income taxation. Accordingly, provisions for income taxes have not been recorded in CMS's financial statements. CASH EQUIVALENTS CMS considers all short-term debt investments with a maturity of three months or less at the date of acquisition to be cash equivalents. Supplemental disclosure of non-cash investing and financing activities: On June 1, 1994, Dr. Harvey purchased the medical equipment and the goodwill of an existing medical practice. In connection with the acquisition, a promissory note payable was executed for $150,000 and capital leases of $15,329 was assumed. Effective January 1, 1995, the form of ownership was changed to that of a professional association. In connection with the ownership change, the then existing equity of the proprietor was recapitalized by the issuance of $100 of capital stock and the remaining equity was credited to retained earnings. In 1995, CMS acquired medical equipment totaling $108,170 and prepaid supplies and maintenance services totaling $67,680 through the execution of capital leases totaling $175,850. FAIR VALUE OF FINANCIAL INSTRUMENTS The fair value of accounts receivable, notes payable and accrued expenses payable are estimated by management to approximate their respective carrying values. 11 Convenience Medical Services, P.A. Stephen A. Harvey, M.D. Notes to Financial Statements 2. OFFICE AND MEDICAL EQUIPMENT Office and medical equipment consists of the following at December 31, 1995 and 1994:
1995 1994 ------------------- -------------------- Office and medical equipment $ 160,070 $ 51,900 Less, accumulated depreciation and amortization 27,910 3,830 ------------------- -------------------- $ 132,160 $ 48,070 =================== ====================
At December 30, 1995 and 1994, the cost of equipment under capital leases was $118,170 and $10,000, respectively, and accumulated amortization thereon was $18,000 and $300, respectively. Amortization of assets under capital lease is reported in depreciation and amortization. 3. DESCRIPTION OF LEASING ARRANGEMENTS CMS leases certain medical equipment under capital leases expiring on various dates through April, 2000. At the end of the lease terms, CMS is generally transferred title to the leased equipment or, in some cases, the payment of a fee representing residual value is required. The following is a schedule by years of the future minimum lease payments under capital leases together with the present value of the net minimum lease payments as of December 31, 1995. 1996 $ 49,949 1997 49,949 1998 44,998 1999 44,549 2000 9,139 ------------------- Total minimum lease payments 198,584 Less amounts representing interest 37,686 ------------------- Present value of minimum lease payments 160,898 Less current portion of lease obligations 35,595 ------------------- Capital lease obligation $ 125,303 =================== 12 Convenience Medical Services, P.A. Stephen A. Harvey, M.D. Notes to Financial Statements 3. DESCRIPTION OF LEASING ARRANGEMENTS, CONTINUED CMS leases office space under a month-to-month operating lease (Note 5). Total rental expense was $101,398 and $10,480 for the year ended December 1, 1995 and the seven months ended December 31, 1994, respectively. 4. LONG-TERM DEBT Long-term debt consists of an unsecured promissory note bearing interest at 8% commencing October 1, 1994 and maturing May 1, 1999. At inception, the note required twelve monthly payments of $4,055, including principal and interest, and forty four payments of $3,041, including principal and interest. Maturities of long-term debt are as follows: 1996 $ 29,148 1997 31,567 1998 34,188 1999 10,423 --------------- 105,326 Less, current amount 29,148 --------------- Long-term debt $ 76,178 =============== 5. RELATED PARTY TRANSACTIONS Stephen A. Harvey, M.D., the sole stockholder, participates in the medical activities of CMS. All payments for services and benefits to Stephen A. Harvey, M.D. are recorded as salaries and are included in cost of operations in the financial statements. For the periods ended December 31, 1995 and 1994, amounts paid to the stockholder were $47,500 and $0, respectively. At December 31, 1995 and 1994, Stephen A. Harvey had been advanced $1,351 and $10,000, respectively. CMS leases its medical office facilities under an operating lease executed with the shareholder. The terms of the lease provide that CMS will pay all insurance, taxes and utilities. The lease expires February 29, 1996 (Note 7). During 1995 and 1994, lease expense paid to Dr. Harvey was $101,398 and $6,206, respectively. 13 Convenience Medical Services, P.A. Stephen A. Harvey, M.D. Notes to Financial Statements 6. CONCENTRATION OF CREDIT RISK In the normal course of providing health care services, CMS extends credit to patients in the North Myrtle Beach, South Carolina area without requiring collateral. Each individual's ability to pay balances due CMS is assessed and reserves are established to provide for management's estimate of uncollectable balances. Future revenues of CMS are largely dependent on third-party payors and include Medicare and private insurance companies. The amount of loss CMS would incur in the event of non-payment by the counter party is the amount of the patient billing. 7. CONTINGENCIES At December 31, 1995, management and its legal counsel are not aware of any pending or threatened litigation, or unasserted claims against CMS that could result in losses, if any, that would be material to the financial statements. 8. SUBSEQUENT EVENT On March 1, 1996, UCI Medical Affiliates of South Carolina, Inc. ("UCI") acquired certain office and medical equipment and substantially all of CMS's assets (including patient lists and goodwill) for $600,000 consisting of $300,000 in restricted common stock of UCI, $60,000 cash, the issuance of a $240,000 interest bearing promissory note, and the assumption of certain capital and operating equipment leases. In addition, UCI executed a lease with Dr. Harvey for the lease of CMS's office facilities for a period commencing March 1, 1996 and ending April 30, 1997. As a condition of the above transaction, Stephen A. Harvey, M.D. entered into an agreement not-to-compete with UCI for a period of three years. 14 UCI Medical Affiliates, Inc. Pro Forma Combining Balance Sheet September 30, 1995 (Unaudited) The following pro forma combining balance sheet is based on the individual balance sheets of UCI Medical Affiliates, Inc. as of September 30, 1995 per the Company's Annual Report and Convenience Medical Services, P.A. as of December 31, 1995 appearing in item 7a of this filing. The information has been prepared to reflect the acquisition by UCI Medical Affiliates, Inc. of Convenience Medical Services, P.A. after giving effect to the pro forma adjustments described in Note 1. This statement should be read in conjunction with each entity's financial statements and footnotes.
UCI Medical Convenience Affiliates, Medical Pro Forma Pro Forma Inc. Services, P.A. Adjustments Combined --------------- ----------------- --------------- ------------- ASSETS Cash and cash equivalents $ 76,513 $ 1,521 $ (60,000) (a) $ 124,013 107,500 (c) (1,521) (b) Accounts receivable - net 2,343,325 114,421 (114,421) (b) 2,343,325 Medical supplies inventory 265,068 -- -- 265,068 Deferred taxes 491,543 -- -- 491,543 Prepaids and other assets 282,060 55,528 -- 337,588 Goodwill 3,578,371 103,155 (38,214) (d) 4,113,367 (103,155) (b) 573,210 (a) Property and equipment, net 2,795,384 132,160 -- 2,927,544 Deferred taxes 120,639 -- -- 120,639 Other assets 262,768 1,351 (1,351) (b) 262,768 --------------- ----------------- --------------- ------------ Total assets $ 10,215,671 $ 408,136 $ 362,048 $ 10,985,855 =============== ================= =============== ============= LIABILITIES AND CAPITAL Current portion - long-term $ 1,244,603 $ 59,148 $ (59,148) (b) $ 1,329,603 debt 85,000 (a) Current - capital lease -- 35,595 -- 35,595 Accounts payable 1,652,792 38,730 (38,730) (b) 1,652,792 Accrued payroll 498,791 -- -- 498,791 Other accrued liabilities 445,362 445,362 Long-term debt, net of current 3,121,098 76,178 (76,178) (b) 155,000 (a) 3,276,098 Capital lease obligations -- 125,303 125,303 Common stock 175,408 100 (100) (b) 3,636 (a) 179,044 Paid-in capital 9,694,256 -- 296,364 (a) 9,990,620 Accumulated earnings (deficit) (73,082) (b) (6,616,639) 73,082 69,286 (e) (6,547,353) --------------- ----------------- --------------- ------------ Total liabilities and capital $ 10,215,671 $ 408,136 $ 362,048 $ 10,985,855 =============== ================= =============== =============
15 UCI Medical Affiliates, Inc. Notes to Pro Forma Combining Balance Sheet September 30, 1995 (Unaudited) 1. The pro forma combining balance sheet has been prepared to reflect the acquisition of Convenience Medical Services, P.A. by UCI Medical Affiliates, Inc. for an aggregate price of $600,000. The purchase occurred on March 1,1996. The combining balance sheet reflects the balances of UCI at September 30, 1995 and Convenience Medical Services, P.A. at December 31, 1995. Pro forma adjustments are made to reflect: (a.) Assets acquired and liabilities assumed are summarized as follows: $ 132,160 Furniture and equipment 55,528 Prepaid expenses 573,210 Goodwill (3,636) Common shares issued (296,364) Additional paid in capital (160,898) Capital leases assumed (240,000) Notes payable ------------------- $ 60,000 Cash paid at closing =================== $85,000 of the note payable is recorded as currently due, $155,000 is recorded as non-current. Issuance of restricted common stock at estimated per share value of $4.125. (b.) Accounts receivable ($114,421), prior owner's goodwill ($103,155), cash ($1,521), and owner's advance ($1,351) were not acquired. Accounts payable (38,730), long-term debt ($135,326), and prior owner's equity ($73,182) were not acquired or assumed. (c.) Dr. Harvey and his management consultant will no longer be employed . In 1995 their combined salaries were $107,500. (d.) Goodwill in the amount of $573,210 is amortized over 15 years. One year's amortization is $38,214. (e.) Effects of proforma adjustments on statement of operations, closed into proforma retained earnings. 16 UCI Medical Affiliates, Inc. Pro Forma Statement of Operations and Accumulated Deficit for the year ended September 30, 1995 (Unaudited) The following pro forma combining statement is based on the individual statements of operations and accumulated deficit of UCI Medical Affiliates, Inc. as of September 30, 1995 per the Company's Annual Report and Convenience Medical Services, P.A.. as of December 31, 1995 appearing in item 7a of this filing. The information has been prepared to reflect the acquisition by UCI Medical Affiliates, Inc. of Convenience Medical Services, P.A. after giving effect to the pro forma adjustments described in Note 1. This statement should be read in conjunction with each entity's financial statements and footnotes.
UCI Medical Convenience Affiliates, Medical Pro Forma Pro Forma Inc. Services, P.A. Adjustments Combined -------------- ------------------ --------------- ---------------- Revenue $ 17,987,147 $ 832,229 $ -- $ 18,819,376 Operating costs 18,180,080 770,029 (107,500) (a) 18,842,609 -------------- ------------------ --------------- ---------------- Operating margin (192,933) 62,200 (107,500) (23,233) General and administrative expenses 87,616 31,786 -- 119,402 Depreciation and amortization 579,224 31,768 38,214 (b) 649,206 -------------- ------------------ --------------- ---------------- Loss from operations (859,773) (1,354) (69,286) (791,841) Interest expense, net 505,459 11,008 -- 516,467 Gain on equipment 5,493 -- -- 5,493 -------------- ------------------ --------------- ---------------- Loss before income tax (1,359,739) (12,362) (69,286) (1,302,815) Benefit for income taxes -- -- -- -- -------------- ------------------ --------------- ---------------- Net loss (1,359,739) (12,362) (69,286) (1,302,815) Accumulated deficit - beginning of year (5,256,896) 85,444 -- (5,244,538) -------------- ------------------ --------------- ---------------- Accumulated deficit - end of year $ (6,616,639) $ 73,082 -- $ (6,547,353) ============== ================== =============== ================ Earnings per common and common equivalent share: Net income $ (.43) (c) $ (.41) ============== ================== =============== ================ Weighted average shares of common stock outstanding 3,136,544 (c) 3,209,272 ============== ================== =============== ================
17 UCI Medical Affiliates, Inc. Note to Pro Forma Combining Statement of Operations and Accumulated Deficit for the year ended September 30, 1995 (Unaudited) 1. The pro forma combining statement of operations gives effect to the following pro forma adjustments necessary to reflect the acquisition outlined in Note 1 to the pro forma balance sheet: (a) Net change in professional and management advisory salaries based on non-competition agreement between the Stephen A. Harvey, M.D. , and UCI Medical Affiliates, Inc. (b) Addition for amortization of goodwill on a straight line basis over 15 years. (c) Not applicable; Convenience Medical Services, P.A. was not required to, and did not, compute earnings per share. 18 UCI Medical Affiliates, Inc. Pro Forma Combining Balance Sheet March 31, 1996 (Unaudited) The following pro forma combining balance sheet is based on the individual balance sheets of UCI Medical Affiliates, Inc. as of March 31, 1996 per the Company's Form 10QSB and Convenience Medical Services, P.A. as of December 31, 1995 appearing in item 7a of this filing. The information has been prepared to reflect the acquisition by UCI Medical Affiliates, Inc. of Convenience Medical Services, P.A. after giving effect to the pro forma adjustments described in Note 1. This statement should be read in conjunction with each entity's financial statements and footnotes.
UCI Medical Convenience Affiliates, Medical Pro Forma Pro Forma Inc. Services, P.A. Adjustments Combined --------------- ----------------- --------------- ------------- ASSETS Cash and cash equivalents $ 174,160 $ 1,521 $ (60,000) (a) $ 157,057 (1,521) (b) 53,750 (c) (10,853) (e) Accounts receivable - net 3,064,385 114,421 (114,421) (b) 3,064,385 Medical supplies inventory 267,356 -- -- 267,356 Deferred taxes 491,543 -- -- 491,543 Prepaids and other assets 419,567 55,528 -- 475,095 Goodwill 4,818,258 103,155 573,210 (a) 5,372,362 (103,155) (b) (19,106) (d) Property and equipment, net 3,051,091 132,160 -- 3,183,251 Deferred taxes 120,639 -- -- 120,639 Other assets 282,054 1,351 (1,351) (b) 282,054 --------------- ----------------- --------------- ------------- Total assets $ 12,689,053 $ 408,136 $ 316,553 $ 13,413,742 =============== ================= =============== ============= LIABILITIES AND CAPITAL Current portion - long-term $ 1,614,574 $ 59,148 $ (59,148) (b) $ 1,699,574 debt 85,000 (e) Current - capital lease -- 35,595 -- 35,595 Accounts payable 1,009,289 38,730 (38,730) (b) 1,009,289 Accrued payroll 551,328 -- -- 551,328 Other accrued liabilities 381,714 -- 381,714 Long-term debt, net of current 155,000 (a) 3,116,696 76,178 (76,178) (b) 3,271,696 Non-current capital leases -- 125,303 125,303 Common stock 214,578 100 (100) (b) 3,636 (a) 218,214 Paid-in capital 12,129,979 -- 296,364 (a) 12,426,343 Accumulated earnings (deficit) 23,791 (f) (6,329,105) 73,082 (73,082) (b) (6,305,314) --------------- ----------------- --------------- ------------- Total liabilities and capital $ 12,689,053 $ 408,136 $ 316,553 $ 13,413,742 =============== ================= =============== =============
19 UCI Medical Affiliates, Inc. Notes to Pro Forma Combining Balance Sheet March 31, 1996 (Unaudited) 1. The pro forma combining balance sheet has been prepared to reflect the acquisition of Convenience Medical Services, P.A. by UCI Medical Affiliates, Inc. for an aggregate price of $600,000. The purchase occurred on March 1,1996. The combining balance sheet reflects the balances of UCI at March 31, 1996 and Convenience Medical Services, P.A. at December 31, 1995. Pro forma adjustments are made to reflect: (a.) Assets acquired and liabilities assumed are summarized as follows: $ 132,160 Furniture and equipment 55,528 Prepaid expenses 573,210 Goodwill (3,636) Common shares issued (296,364) Additional paid in capital (160,898) Capital leases assumed (240,000) Notes payable ------------------- $ 60,000 Cash paid at closing =================== $85,000 of the note payable is recorded as currently due, $155,000 is recorded as non-current. Issuance of restricted common stock at estimated per share value of $4.125. (b.) Accounts receivable ($114,421), prior owner's goodwill ($103,155), cash ($1,521) and owner's advance ($1,351) were not acquired. Accounts payable ($38,730), long-term debt ($135,326), and prior owner's equity ($73,182) were not acquired or assumed. (c.) Dr Harvey and his management consultant will no longer be employed. Salaries no longer included are $53,750 for the six month period. (d.) Goodwill in the amount of $573,210 is amortized over 15 years. Six months amortization is $19,106. (e.) Interest expense for six months of $10,853 is recorded as paid in cash. (f). Changes in CMS's equity as a result of adjustments on pro forma statement of operations. 20 UCI Medical Affiliates, Inc. Pro Forma Statement of Operations and Accumulated Deficit for the six months ended March 31, 1996 (Unaudited) The following pro forma combining statement is based on the individual statements of operations and accumulated deficit of UCI Medical Affiliates, Inc. for the six months ended March 31, 1996 per the Company's Form 10QSB and Convenience Medical Services, P.A. for the six months ended December 31, 1995. The information has been prepared to reflect the acquisition by UCI Medical Affiliates, Inc. of Convenience Medical Services, CMS after giving effect to the pro forma adjustments described in Note 1. Information for the six months ended March 31, 1996 for Convenience Medical Services, P.A. is estimated since Convenience did not maintain its records on a basis consistent with UCI Medical Affiliates, Inc. This statement should be read in conjunction with each entity's financial statements and footnotes.
UCI Medical Convenience Affiliates, Medical Pro Forma Pro Forma Inc. Services, P.A. Adjustments Combined --------------- ----------------- --------------- --------------- Revenue $ 11,069,503 $ 416,114 $ -- $ 11,485,617 Operating costs 9,999,069 385,014 (53,750) (a) 10,330,333 --------------- ----------------- --------------- --------------- Operating margin 1,070,434 31,100 53,750 1,155,284 General and administrative expenses 62,237 15,892 -- 78,129 Depreciation and amortization 433,815 15,884 19,106 (b) 468,805 --------------- ----------------- --------------- --------------- Income from operations 574,382 (676) 34,644 608,350 Interest expense, net 288,953 5,504 10,853 (c) 305,310 Gain on equipment (2,105) -- -- (2,105) --------------- ----------------- --------------- --------------- Income before income tax 287,534 (6,180) 23,791 305,145 Benefit for income taxes -- -- -- -- --------------- ----------------- --------------- --------------- Net income (loss) 287,534 (6,180) 23,791 305,145 Accumulated deficit - beginning of year (6,616,639) 85,444 -- (6,610,459) --------------- ----------------- --------------- --------------- Accumulated deficit - end of period $ (6,329,105) $ 76,174 $ $ (6,305,314) =============== ================= =============== =============== Earnings per common and common equivalent share: Net income $ .07 (d) $ .08 =============== ================= =============== =============== Weighted average shares of common stock outstanding 3,932,259 (d) 4,004,987 =============== ================= =============== ===============
21 UCI Medical Affiliates, Inc. Note to Pro Forma Combining Statement of Operations and Accumulated Deficit for the six months ended March 31, 1996 (Unaudited) 1. The proforma combining statement of operations gives effect to the following pro forma adjustments necessary to reflect the acquisition outlined in Note 1 to the pro forma balance sheet: (a) Net change in professional and management advisory salaries based on non-competition agreement between the Stephen A. Harvey, M.D. , and UCI Medical Affiliates, Inc. (b) Addition for amortization of goodwill on a straight line basis over 15 years. (c.) Interest expense for six months of $10,853 is recorded as paid in cash. (d) Not applicable; Convenience Medical Services, P.A. was not required to, and did not, compute earnings per share. 22 Report on Audit of the Financial Statements of Carolina Examination Services, Inc. as of December 31, 1995 and 1994 23 UCI Medical Affiliates, Inc. CONTENTS
Page Carolina Examination Services, Inc. Financial Statements as of December 31, 1995 and 1994................................................................26-31 UCI Medical Affiliates, Inc. Pro Forma Combining Financial Statements Combining Balance Sheet at September 30, 1995.................................................. 32 Notes to Combining Balance Sheet............................................................... 33 Combining Statement of Operations and Accumulated Deficit for year ended September 30, 1995........................................................... 34 Notes to Combining Statement of Operations..................................................... 35 UCI Medical Affiliates, Inc. Pro Forma Combining Financial Statements Combining Balance Sheet at March 31, 1996...................................................... 36 Notes to Combining Balance Sheet............................................................... 37 Combining Statement of Operations and Accumulated Deficit for the six months ended March 31, 1996................................................... 38 Notes to Combining Statement of Operations..................................................... 39
24 Report of Independent Accountants Board of Directors UCI Medical Affiliates, Inc. We have audited the accompanying balance sheets of Carolina Examination Services, Inc. as of December 31, 1995 and 1994 and the related statements of operations and accumulated deficit and cash flows for the years then ended. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Carolina Examination Services, Inc. as of December 31, 1995 and 1994, and the results of its operations and its cash flows for the years then ended in conformity with generally accepted accounting principles. The financial statements have been prepared solely from the accounts of Carolina Examination Services, Inc. and do not include the personal accounts of the stockholder or those of any other operations in which he may be engaged. THE ORIGINAL SIGNED OPINION LETTER IS ON FILE WITH UCI MEDICAL AFFILIATES, INC. Columbia, South Carolina May 7, 1996 25 Carolina Examination Services, Inc. Balance Sheets December 31,
1995 1994 -------- -------- ASSETS Current assets: Cash and cash equivalents $ 473 $ 9,419 Accounts receivable, net 4,692 5,280 -------- -------- Total current assets 5,165 14,699 Other assets 1,200 -- -------- -------- Total assets $ 6,365 $ 14,699 ======== ======== LIABILITIES AND STOCKHOLDER'S EQUITY Current liabilities: Accounts payable and accrued expenses $ 21,129 $ 21,326 -------- -------- Stockholder's equity Capital stock, $1 par value; 100,000 shares authorized; 1,000 shares issued and outstanding 1,000 1,000 Accumulated deficit (15,764) (7,627) -------- -------- Stockholder's equity (14,764) (6,627) -------- -------- Total liabilities and stockholder's equity $ 6,365 $ 14,699 ======== ========
The accompanying notes are an integral part of these financial statements. 26 Carolina Examination Services, Inc. Statements of Operations and Accumulated Deficit for the years ended December 31,
1995 1994 ------------------ ------------------ Net medical revenue $ 109,777 $ 140,073 Operating costs 111,763 123,543 ------------------ ------------------ Operating income (loss) (1,986) 16,530 General and administrative expenses 6,151 9,051 ------------------ ------------------ Net income (loss) (8,137) 7,479 Accumulated deficit, beginning of year (7,627) (15,106) ------------------ ------------------ Accumulated deficit, end of year $ (15,764) $ (7,627) ================== ==================
The accompanying notes are an integral part of these financial statements. 27 Carolina Examination Services, Inc. Statements of Cash Flows for the years ended December 31,
1995 1994 ------------------ ------------------ OPERATING ACTIVITIES: Net income (loss) $ (8,137) $ 7,479 Adjustments to reconcile net income to cash provided by operating activities: Changes in operating assets and liabilities: Accounts receivable 588 (1,145) Other assets (1,200) -- Accounts payable and accrued expenses (197) 3,085 ------------------ ------------------ Cash provided by operating activities (8,946) 9,419 ------------------ ------------------ Net increase (decrease) in cash and cash equivalents (8,946) 9,419 Cash and cash equivalents, beginning of year 9,419 0 ------------------ ------------------ Cash and cash equivalents, end of year $ 473 $ 9,419 ================== ================== Supplemental cash flow information: Cash paid for interest $ -- $ -- ================== ==================
The accompanying notes are an integral part of these financial statements. 28 CAROLINA EXAMINATION SERVICES, INC. NOTES TO FINANCIAL STATEMENTS 1. SIGNIFICANT ACCOUNTING POLICIES ORGANIZATION Robert Borucki, M.D. is the sole stockholder of Carolina Examination Services, Inc. ("Services") located in Columbia, South Carolina. Services operates a practice medical office that provides examination services on an outpatient basis for medical conditions not involving an immediate threat to life. The financial statements have been prepared solely from the accounts of Services and do not include the personal accounts of Robert Borucki, M.D. or those of any other activities in which he may be engaged. Management makes estimates that are a necessary part of the preparation of financial statements. These estimates include the useful lives of equipment, some of which is subject to technological obsolescence, and the net realizable value of patient accounts receivable. At December 31, 1995, management is not aware of any conditions that could significantly affect the estimates employed in the preparation of the financial statements. ACCOUNTS RECEIVABLE Accounts receivable represent amounts due from patients, employers and various third-party payors. Provisions for uncollectable amounts are made based on management's estimates of future collectibility and historical payment percentages. OFFICE AND EQUIPMENT Office and equipment is reported at cost. Depreciation for financial reporting purposes is computed principally by the straight-line method over the estimated useful lives of the assets, ranging from five to seven years. Maintenance, repairs and minor renewals are charged to expense. Major renewals or betterments, which prolong the life of the assets, are capitalized. Upon disposal of depreciable property, the asset accounts are reduced by the related cost and accumulated depreciation. The resulting gains and losses are reflected in the statements of operations. 29 Carolina Examination Services, Inc. Notes to Financial Statements 1. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) INCOME TAXES As provided by the Internal Revenue Code, Services has elected S Corporation status. Under this election, net income from Services is reported in the stockholder's individual federal and state income tax returns along with the stockholder's other items of income and expense for the period. Services is not a taxpaying entity for purposes of federal and state income taxation. Accordingly, provisions for income taxes have not been recorded in Services' financial statements. CASH EQUIVALENTS The Company considers all short-term debt investments with a maturity of three months or less at the date of acquisition to be cash equivalents. FAIR VALUE OF FINANCIAL INVESTMENTS The fair value of accounts receivable and accrued expenses and accounts payable are estimated by management to approximate their respective carrying values. 2. OFFICE AND MEDICAL EQUIPMENT Office and medical equipment consists of the following at December 31, 1995 and 1994:
1995 1994 ------------------- -------------------- Office and medical equipment $ 5,941 $ 5,941 Less, accumulated depreciation and amortization 5,941 5,941 ------------------- -------------------- $ -- $ -- =================== ====================
3. RELATED PARTY TRANSACTIONS Robert Borucki, M.D., the sole stockholder, participates in the medical activities of the Company. All payments for services and benefits to Robert Borucki, M.D. are recorded as salaries and are included in cost of operations in the financial statements. For the periods ended December 31, 1995 and 1994, amounts paid to the stockholder (stockholders in 1994) were $4,060 and $49,530, respectively. 30 Carolina Examination Services, Inc. Notes to Financial Statements 4. CONCENTRATION OF CREDIT RISK In the normal course of providing health care services, Services extends credit to patients in the Columbia, South Carolina area without requiring collateral. Each individual's ability to pay balances due Services is assessed and reserves are established to provide for management's estimate of uncollectable balances. Future revenues of Services are largely dependent on third-party payors and include Medicare and private insurance companies. The amount of loss Services would incur in the event of non-payment by the counter party is the amount of the patient billing. 5. CONTINGENCIES At December 31, 1995, management is not aware of any pending or threatened litigation, or unasserted claims against Services that could result in losses, if any, that would be material to the financial statements. 6. SUBSEQUENT EVENT On March 1, 1996, UCI Medical Affiliates of South Carolina, Inc. ("UCI") acquired certain office and medical equipment and substantially all the Company's assets (including patient lists and goodwill) for $125,000 consisting of $100,000 in restricted common stock of UCI and the assumption of $25,000 of accrued liabilities. As a condition of the above transaction, Robert Borucki, M.D. entered into a 1 year employment agreement with UCI. 31 UCI Medical Affiliates, Inc. Pro Forma Combining Balance Sheet September 30, 1995 (Unaudited) The following pro forma combining balance sheet is based on the individual balance sheets of UCI Medical Affiliates, Inc. as of September 30, 1995 per the Company's Annual Report and Carolina Examination Services, Inc. as of December 31, 1995 appearing in item 7a of this filing. The information has been prepared to reflect the acquisition by UCI Medical Affiliates, Inc. of Carolina Examination Services, Inc. after giving effect to the pro forma adjustments described in Note 1. This statement should be read in conjunction with each entity's financial statements and footnotes.
UCI Medical Carolina Affiliates, Examination Pro Forma Pro Forma Inc. Services, Inc. Adjustments Combined --------------- ----------------- -------------- -------------- ASSETS Cash and cash equivalents $ 76,513 $ 473 $ (473) (b) $ 68,513 (8,000) (c) Accounts receivable - net 2,343,325 4,692 (4,692) (b) 2,343,325 Medical supplies inventory 265,068 -- -- 265,068 Deferred taxes 491,543 -- -- 491,543 Prepaids and other assets 282,060 -- -- 282,060 Goodwill 3,578,371 -- 125,000 (a) 3,695,038 (8,333) (d) Property, plant and equipment, net 2,795,384 -- -- 2,795,384 Deferred taxes 120,639 -- -- 120,639 Other assets 262,768 1,200 (1,200) (b) 262,768 --------------- ----------------- -------------- -------------- Total assets $ 10,215,671 $ 6,365 $ 102,302 $ 10,324,338 =============== ================= ============== ============== LIABILITIES AND CAPITAL Current portion - long-term debt $ 1,244,603 $ -- $ -- $ 1,244,603 Accounts payable 1,652,792 21,129 (21,129) (b) 1,677,792 25,000 (a) Accrued payroll 498,791 -- -- 498,791 Other accrued liabilities 445,362 -- -- 445,362 Long-term debt, net of current 3,121,098 -- -- 3,121,098 (1,000) (b) Common stock 175,408 1,000 1,212 (a) 176,620 Paid-in capital 9,694,256 -- 98,788 (a) 9,793,044 Accumulated earnings 15,764 (b) (deficit) (6,616,639) (15,764) (16,333) (e) (6,632,972) --------------- ----------------- -------------- -------------- Total liabilities and capital $ 10,215,671 $ 6,365 $ 102,302 $ 10,324,338 =============== ================= ============== ==============
32 UCI Medical Affiliates, Inc. Notes to Pro Forma Combining Balance Sheet September 30, 1995 (Unaudited) 1. The pro forma combining balance sheet has been prepared to reflect the acquisition of Carolina Examination Services, Inc. by UCI Medical Affiliates, Inc. for an aggregate price of $125,000. The purchase occurred on March 1,1996. The combining balance sheet reflects the balances of UCI at September 30, 1995 and Carolina Examination Services, Inc. at December 31, 1995. Pro forma adjustments are made to reflect: (a.) Assets acquired and liabilities assumed are summarized as follows: $ 125,000 Goodwill (1,212) Common shares issued (98,788) Additional paid in capital (25,000) Accounts payable --------------- $ 0 Cash paid at closing =============== Issuance of restricted common stock at estimated per share value of $4.125. (b.) Accounts receivable ($4,692), cash ($473), other assets ($1,200), prior owners equity ($14,764) were not acquired. (c.) Dr. Borucki's salary for one year less amounts paid in 1995, $8,000. (d.) Goodwill in the amount of $125,000 is amortized over 15 years. One years amortization is $8,333. (e.) Effects of proforma adjustments on statement of operations, closed into proforma retained earnings. 33 UCI Medical Affiliates, Inc. Pro Forma Statement of Operations and Accumulated Deficit for the year ended September 30, 1995 (Unaudited) The following pro forma combining statement is based on the individual statements of operations and accumulated deficit of UCI Medical Affiliates, Inc. as of September 30, 1995 per the Company's Annual Report and Carolina Examination Services, Inc. as of December 31, 1995 appearing in item 7a of this filing. The information has been prepared to reflect the acquisition by UCI Medical Affiliates, Inc. of Carolina Examination Services, Inc. after giving effect to the pro forma adjustments described in Note 1. This statement should be read in conjunction with each entity's financial statements and footnotes.
UCI Medical Carolina Affiliates, Examination Pro Forma Pro Forma Inc. Services, Inc. Adjustments Combined --------------- ----------------- --------------- --------------- Revenue $ 17,987,147 $ 109,777 $ -- $ 18,096,924 Operating costs 18,180,080 111,763 8,000 (a) 18,299,843 --------------- ----------------- --------------- --------------- Operating margin (192,933) (1,986) (8,000) (202,919) General and administrative expenses 87,616 6,151 -- 93,767 Depreciation and amortization 579,224 -- 8,333 (b) 587,557 --------------- ----------------- --------------- --------------- Loss from operations (859,773) (8,137) (16,333) (884,243) Interest expense, net 505,459 -- -- 505,459 Gain on equipment (5,493) -- -- (5,493) --------------- ----------------- --------------- --------------- Loss before income tax (1,359,739) (8,137) (16,333) (1,384,209) Benefit for income taxes -- -- -- -- --------------- ----------------- --------------- --------------- Net loss (1,359,739) (8,137) (16,333) (1,384,209) Accumulated deficit - beginning of year (5,256,896) (7,627) -- (5,248,763) --------------- ----------------- --------------- --------------- Accumulated deficit - end of year $ (6,616,639) $ (15,764) $ -- $ (6,632,972) =============== ================= =============== =============== Earnings per common and common equivalent share: Net loss $ (.43) (c) $ (.44) =============== ================= =============== =============== Weighted average shares of common stock outstanding 3,136,544 (c) 3,160,787 =============== ================= =============== ===============
34 UCI Medical Affiliates, Inc. Note to Pro Forma Combining Statement of Operations and Accumulated Deficit for the year ended September 30, 1995 (Unaudited) 1. The above statement gives effect to the following pro forma adjustments necessary to reflect the acquisition outlined in Note 1 to the pro forma balance sheet: (a) Net change in physician salary based on employment contract between the Robert Borucki, M.D. , and UCI Medical Affiliates, Inc. (b) Addition for amortization of goodwill on a straight line basis over 15 years. (c) Not applicable; Carolina Examination Services, Inc. was not required to, and did not, compute earnings per share. 35 UCI Medical Affiliates, Inc. Pro Forma Combining Balance Sheet March 31, 1996 (Unaudited) The following pro forma combining balance sheet is based on the individual balance sheets of UCI Medical Affiliates, Inc. as of March 31, 1996 per the Company's Form 10QSB and Carolina Examination Services, Inc. as of December 31, 1995 appearing in item 7a of this filing. The information has been prepared to reflect the acquisition by UCI Medical Affiliates, Inc. of Carolina Examination Services, Inc. after giving effect to the pro forma adjustments described in Note 1. This statement should be read in conjunction with each entity's financial statements and footnotes.
UCI Medical Carolina Affiliates, Examination Pro Forma Pro Forma Inc. Services, Inc. Adjustments Combined --------------- ----------------- -------------- -------------- ASSETS Cash and cash equivalents $ 174,160 $ 473 $ (4,000) (c) $ 170,160 (b) (473) Accounts receivable - net 3,064,385 4,692 (4,692) (b) 3,064,385 Medical supplies inventory 267,356 -- -- 267,356 Deferred taxes 491,543 -- -- 491,543 Prepaids and other assets 419,567 -- -- 419,567 Goodwill 4,818,258 -- 125,000 (a) 4,939,092 (4,166) (d) Property, plant and equipment, net 3,051,091 -- -- 3,051,091 Deferred taxes 120,639 -- -- 120,639 Other assets 282,054 1,200 (1,200) (b) 282,054 --------------- ----------------- -------------- -------------- Total assets $ 12,689,053 $ 6,365 $ 110,469 $ 12,805,887 =============== ================= ============== ============== LIABILITIES AND CAPITAL Current portion - long-term debt $ 1,614,574 $ -- $ -- $ 1,614,574 Accounts payable 1,009,289 21,129 (21,129) (b) 1,034,289 25,000 (a) Accrued payroll 551,328 -- -- 551,328 Other accrued liabilities 381,714 -- -- 381,714 Long-term debt, net of current 3,116,696 -- -- 3,116,696 (1,000) (b) Common stock 214,578 1,000 1,212 (a) 215,790 Paid-in capital 12,129,979 -- 98,788 (a) 12,228,767 Accumulated earnings 15,764 (b) (deficit) (6,329,105) (15,764) (8,166) (e) (6,337,271) --------------- ----------------- -------------- -------------- Total liabilities and capital $ 12,689,053 $ 6,365 $ 110,469 $ 12,805,887 =============== ================= ============== ==============
36 UCI Medical Affiliates, Inc. Notes to Pro Forma Combining Balance Sheet March 31, 1996 (Unaudited) 1. The pro forma combining balance sheet has been prepared to reflect the acquisition of Carolina Examination Services, Inc. by UCI Medical Affiliates, Inc. for an aggregate price of $125,000. The purchase occurred on March 1,1996. The combining balance sheet reflects the balances of UCI at March 31, 1996 and Carolina Examination Services, Inc. at December 31, 1995. Pro forma adjustments are made to reflect: (a.) Assets acquired and liabilities assumed are summarized as follows: $ 125,000 Goodwill (1,212) Common shares issued (98,788) Additional paid in capital (25,000) Accounts payable --------------- $ 0 Cash paid at closing =============== Issuance of restricted common stock at estimated per share value of $4.125. (b.) Accounts receivable ($4,692), cash ($473), other assets ($1,200), prior owner's equity ($14, 764) were not acquired. (c.) Dr. Borucki's salary for six months less one half amount paid in 1995, $4,000. (d.) Goodwill in the amount of $125,000 is amortized over 15 years. Six months amortization is $4,166. (e.) Effects of proforma adjustments on statement of operations, closed into retained earnings. 37 UCI Medical Affiliates, Inc. Pro Forma Statement of Operations and Accumulated Deficit for the six months ended March 31, 1996 (Unaudited) The following pro forma combining statement is based on the individual statements of operations and accumulated deficit of UCI Medical Affiliates, Inc. as of March 31, 1996 per the Company's Form QSB and Carolina Examination Services, Inc. as of December 31, 1995 appearing in item 7a of this filing. The information has been prepared to reflect the acquisition by UCI Medical Affiliates, Inc. of Carolina Examination Services, Inc. after giving effect to the pro forma adjustments described in Note 1. Information for the six months ended March 31, 1996 for Carolina Examination Services, Inc. is estimated since Carolina did not maintain its records on a basis consistent with UCI Medical Affiliates, Inc. This statement should be read in conjunction with each entity's financial statements and footnotes.
UCI Carolina Medical Examination Pro Forma Pro Forma Affiliates, Inc. Services, Inc. Adjustments Combined ----------------- ---------------- -------------- -------------- Revenue $ 11,069,503 $ 54,888 $ -- $ 11,124,391 Operating costs 9,999,069 55,881 4,000 (a) 10,058,950 ----------------- ---------------- -------------- -------------- Operating margin 1,070,434 (993) (4,000) 1,065,441 General and administrative expenses 62,237 3,075 -- 65,312 Depreciation and amortization 433,815 -- 4,166 (b) 437,981 ----------------- ---------------- -------------- -------------- Income from operations 574,382 (4,068) (8,166) 562,148 Interest expense, net 288,953 -- -- 288,953 Gain on equipment (2,105) -- -- (2,105) ----------------- ---------------- -------------- -------------- Income before income tax 287,534 (4,068) (8,166) 275,300 Benefit for income taxes -- -- -- -- ----------------- ---------------- -------------- -------------- Net income 287,534 (4,068) (8,166) 275,300 Accumulated deficit - beginning of year (6,616,639) (7,627) -- (6,612,571) ----------------- ---------------- -------------- -------------- Accumulated deficit - end of period $ (6,329,105) $ (11,695) $ -- $ (6,337,271) ================= ================ ============== ============== Earnings per common and common equivalent share: Net income $ .07 (c) $ .07 ================= ================ ============== ============== Weighted average shares of common stock outstanding 3,932,259 (c) 3,956,502 ================= ================ ============== ==============
38 UCI Medical Affiliates, Inc. Note to Pro Forma Combining Statement of Operations and Accumulated Deficit for the six months ended March 31, 1996 (Unaudited) 1. The above statement gives effect to the following pro forma adjustments necessary to reflect the acquisition outlined in Note 1 to the pro forma balance sheet: (a) Net change in physician salary based on employment contract between Robert Borucki, M.D. , and UCI Medical Affiliates, Inc. (b) Addition for amortization of goodwill on a straight line basis over 15 years. (c) Not applicable; Carolina Examination Services, Inc. was not required to, and did not, compute earnings per share. 39 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 hereunto duly authorized. UCI Medical Affiliates, Inc. (Registrant) /s/ M.F. McFarland, III, M.D. /s/ Jerry F. Wells, Jr. President, Chief Executive Officer and Vice President of Finance and Chairman of the Board Chief Financial Officer Date: May 13, 1996 40 -----END PRIVACY-ENHANCED MESSAGE-----