-----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, DDJD2mzC8BY1xtw5NbysypSp9Vjvx1JN3fN+p0G3MtGkQg7NRfaEQ/Stuvyj7P4x KxM0xzmnByZRHE3aVF0EMQ== 0000950109-96-006714.txt : 19961016 0000950109-96-006714.hdr.sgml : 19961016 ACCESSION NUMBER: 0000950109-96-006714 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19961007 ITEM INFORMATION: Other events ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 19961015 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: EQUIMED INC CENTRAL INDEX KEY: 0000892493 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-SPECIALTY OUTPATIENT FACILITIES, NEC [8093] IRS NUMBER: 251668112 STATE OF INCORPORATION: PA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-12578 FILM NUMBER: 96643453 BUSINESS ADDRESS: STREET 1: 3754 LAVISTA RD CITY: TUCKER STATE: GA ZIP: 30084 BUSINESS PHONE: 4043206211 FORMER COMPANY: FORMER CONFORMED NAME: EQUIVISION INC DATE OF NAME CHANGE: 19930804 8-K 1 FORM 8-K 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 Report (Date of earliest event reported): October 7, 1996 ------------------------------- EQUIMED, INC. - -------------------------------------------------------------------------------- (Exact Name of Registrant as Specified in Charter) Delaware 0-27456 25-1668112 - -------------------------------------------------------------------------------- (State or Other (Commission File Number) (I.R.S. Employer Jurisdiction of Incorporation Identification No.) 3754 LaVista Road Tucker, Georgia 30084-5637 - -------------------------------------------------------------------------------- (Address of Principal (Zip Code) Executive Offices) (404)320-6211 - -------------------------------------------------------------------------------- (Registrant's Telephone Number, Including Area Code) Not Applicable - -------------------------------------------------------------------------------- (Former Name or Former Address, If Changed Since Last Report) Item 5. Other Events On October 7, 1996, EquiMed, Inc. (the "Company" or "EquiMed") entered into an Asset Purchase Agreement (the "Purchase Agreement") with Physicians Resource Group, Inc., a Delaware corporation ("PRG"), and PRG's wholly-owned subsidiary, PRG Georgia, Inc., a Delaware corporation ("PRG Georgia"), providing for the sale by the Company and the purchase by PRG Georgia of the ophthalmology physician practice management and ambulatory surgery center business of the Company (the "Ophthalmology Business"), including all items of personal property and other assets used in connection with such business and the Company's ownership interest in certain subsidiaries involved in the Ophthalmology Business (the "Transaction"). The consideration to be provided by PRG Georgia to the Company at closing is $54,563,000 in cash plus the assumption of an estimated $14,300,000 of the Company's liabilities related to the Ophthalmology Business, and a further contingent cash amount to be provided no later than May 15, 1997 based upon additional acquisitions of medical practices or centers related to the Ophthalmology Business by the Company, PRG Georgia or another wholly-owned subsidiary of PRG, which acquisitions are consummated by April 30, 1997 and satisfy certain conditions as provided in the Purchase Agreement (the "Contingent Consideration"). The consummation of the Transaction is subject to receipt of all necessary regulatory and other third party approvals and other customary conditions. Each of the parties has certain rights to terminate the Transaction under certain circumstances, including among others, the right of PRG Georgia to terminate at any time prior to November 6, 1996 if, in its sole discretion, its due diligence reveals certain material adverse conditions with respect to the Ophthalmology Business, and the right of either PRG Georgia or the Company to terminate the Transaction if it is not consummated by November 30, 1996, as provided in the Purchase Agreement. If the Company were to receive only the minimum consideration of $54,563,000 in cash and elimination of an estimated $14,300,000 in liabilities related to the probable disposition of the Ophthalmology Business, then an after-tax loss of approximately $34,142,000 would be incurred. This loss however, will be reduced by any Contingent Consideration received by the consummation of additional acquisitions of medical practices and centers by April 30, 1997. The Company will recognize any such Contingent Consideration when realized. Item 7. Financial Statements, Pro Forma Financial Information and Exhibits (b) Pro Forma Financial Information EQUIMED, INC. UNAUDITED PRO FORMA FINANCIAL INFORMATION The following unaudited pro forma balance sheet as of June 30, 1996 and the related unaudited pro forma statement of operations for the six months ended June 30, 1996 have been prepared to give effect to the probable disposition of the Ophthalmology Business by the Company, as if the Transaction had been consummated as of June 30, 1996 with respect to the balance sheet, and January 1, 1996 with respect to the statement of operations. These pro forma statements do not necessarily reflect the financial position and results of operations as they would have been if the Company had completed this disposition on the dates indicated above. This unaudited pro forma financial information should be read in conjunction with the financial statements and notes of the Company. EquiMed's statement of operations for the year ended December 31, 1995, does not include any results of operations of the Ophthalmology Business, as this business was acquired in February 1996 in a business combination accounted for as a purchase. Accordingly, an unaudited pro forma statement of operations for the year ended December 31, 1995 is not presented. 2 EQUIMED, INC. UNAUDITED PRO FORMA BALANCE SHEET JUNE 30, 1996 (IN THOUSANDS)
PRO FORMA ACTUAL ADJUSTMENTS PRO FORMA --------- ------------- ----------- Assets Current Assets: Cash and cash equivalents $ 3,464 $ 53,133 (A) $ 43,318 (13,279) (B) Accounts receivable 15,927 (10,346) (A) 5,581 Receivables from affiliates 569 - 569 Prepaid expenses and other affiliates 2,506 (1,372) (A) 1,134 Deferred income taxes 680 - 680 --------- --------- Total current assets 23,146 51,282 Property and equipment, net 19,220 (7,551) (A) 11,669 Goodwill 37,674 (37,674) (A) - Services agreements 36,638 (31,459) (A) 5,179 Non-compete agreements 1,651 (1,605) (A) 46 Patient records 1,793 (1,756) (A) 37 Other assets 1,175 (742) (A) 433 Deferred income taxes 273 - 273 --------- ---------- --------- $ 121,570 $ (52,651) $ 68,919 ========= ========== ========= Liabilities and stockholders' equity Current liabilities: Accounts payable $ 1,713 $ (166) (A) $ 1,547 Accrued salaries and professional fees 4,053 (1,826) (A) 2,227 Other accrued expenses 4,710 (2,504) (A) 2,206 Income taxes payable 5,675 9,079 (C) 14,754 Current portion of long-term debt and obligations under capital leases 15,987 (900) (A) 1,808 (13,279) (B) --------- --------- Total current liabilities 32,138 22,542 Long-term debt and capital lease obligations 14,108 (8,793) (A) 5,315 Deferred income taxes 2,210 - 2,210 Minority interests 1,534 (120) (A) 1,414 Stockholders' equity: Preferred stock - - - Common stock 82,178 - 82,178 Additional paid-capital 1,760 - 1,760 Accumulated deficit (12,358) (34,142) (46,500) --------- ---------- --------- 71,580 37,438 --------- --------- $ 121,570 $ (52,651) $ 68,919 ========= ========== =========
3 EQUIMED, INC. NOTES TO UNAUDITED PRO FORMA BALANCE SHEET (A) To record (i) cash received (net of transaction costs), (ii) elimination of net assets of the Ophthalmology Business, and (iii) loss incurred in connection with the disposition of the Ophthalmology Business as of June 30, 1996. Consideration received, without giving effect to contingent consideration which may be received, consisted of $53,564,000 in cash and elimination of an estimated $14,300,000 in liabilities. The book value as of June 30, 1996 of assets to be sold was $92,500,000. Transaction costs are approximately $1,430,000. Computation of the loss on disposal of the Ophthalmology Business is as follows: Cash proceeds $ 54,563,000 Less: Transaction costs (1,430,000) ------------ Net cash proceeds 53,133,000 Less: Net assets of Ophthalmology Business (78,196,000) ------------ Loss before income taxes (25,063,000) Provision for income taxes (9,079,000) ------------ Net loss on disposition $(34,142,000) ============ (B) To record the payoff of an EquiMed revolving credit facility utilizing the cash proceeds from the disposition of the Ophthalmology Business. (C) To record income taxes payable in connection with the disposition of the Ophthalmology Business. The Company has provided for income taxes of $9,079,000 because of a permanent difference in the carrying amount of assets sold for tax and financial reporting purposes. 4 EQUIMED, INC. UNAUDITED PRO FORMA STATEMENT OF OPERATIONS SIX MONTHS ENDED JUNE 30, 1996 (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
PRO FORMA ACTUAL ADJUSTMENTS PRO FORMA -------- ------------- ----------- Net revenues $ 50,142 $ (22,755)(A) $ 27,387 Costs and Expenses: Professional fees and expenses 13,261 (6,582)(A) 6,679 Treatment and support services 18,579 (10,019)(A) 8,560 General and administrative expenses 5,875 (2,546)(A) 3,329 Depreciation and amortization 3,068 (1,418)(A) 1,650 Interest expense 1,717 (241)(B) 1,118 (358)(C) Other incomes, net (280) 13 (A) (267) -------- ------------- ----------- Total costs and expenses 42,220 (21,151) 21,069 Income from operations 7,922 (1,604) 6,318 Minority interest 281 (38)(A) 243 Loss on sale of Ophthalmology Business -- 25,063 (A) 25,063 -------- ------------- ----------- Income (loss) before income taxes and extraordinary item 7,641 (26,629) (18,988) Provision for income taxes: Income tax expense 3,145 9,079 (D) 11,316 (908)(E) Cumulative adjustment to establish deferred income taxes for change in tax status 1,277 -- 1,277 -------- ------------- ----------- 4,422 8,171 12,593 -------- ------------- ----------- Income (loss) before extraordinary item $ 3,219 $ (34,800) $ (31,581) ======== ============= =========== Net income (loss) per share $ 0.12 $ (1.18) ======== =========== Weighted average common shares and equivalents 26,867 26,867 ======== ===========
5 EQUIMED, INC. NOTES TO UNAUDITED PRO FORMA STATEMENTS OF OPERATIONS (A) To eliminate the Ophthalmology Business results of operations for the six months ended June 30, 1996. (B) To reduce interest expense on long-term debt and capital lease obligations assumed by the acquiring entity. The interest expense adjustment is based on actual interest expense of $241,000. Borrowings were at an average interest rate of approximately 6.4%. (C) Adjusts interest expense based on the use of proceeds from the disposition of the Ophthalmology Business to reduce borrowings on an EquiMed revolving credit facility. The interest expense adjustment is based on actual interest expense of $358,000. Borrowings were at an average interest rate of approximately 8.5%. (D) Provides $9,079,000 for income tax expense in connection with the loss on disposition of the Ophthalmology Business. The Company has not provided for an income tax benefit at statutory federal and state income tax rates because of permanent differences in the carrying amount of assets sold for tax and financial reporting purposes. (E) Provides $908,000 for income tax expense on the pro forma adjustments to results of operations of the Ophthalmology Business for the six months ended June 30, 1996. 6 (c) Exhibits. 2.1 Asset Purchase Agreement dated as of October 7, 1996 by and among EquiMed, Inc., Physicians Resource Group, Inc., and PRG Georgia, Inc.* - ------- *Filed previously. 7 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. EQUIMED, INC. (Registrant) /s/ William E. Pritts II ----------------------------------- Date: October 14, 1996 By: William E. Pritts II Title: Chief Financial Officer -----END PRIVACY-ENHANCED MESSAGE-----