SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_______________
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) May 17, 1996
QUALITY SYSTEMS, INC.
(Exact name of registrant as specified in charter)
Delaware 0-13801 95-2888568
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
17822 E. 17th Street, Suite 210, Tustin, California 92680
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (714) 731-7171
Not Applicable
(Former name or former address, if changed since last report.)
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
On May 17, 1996, Quality Systems, ("QSI") acquired
Clinitec International, Inc. ("Clinitec"), a Pennsylvania
corporation, in a forward-triangular merger (the "Acquisition").
The Acquisition was achieved pursuant to an Agreement and Plan of
Merger (the "Merger Agreement"), dated May 16, 1996, by and among
QSI, Clinitec, CII Acquisition Corporation ("Sub"), a California
corporation and wholly-owned subsidiary of QSI, and certain
principal shareholders of Clinitec (as indicated in the Merger
Agreement). Pursuant to the Merger Agreement, Clinitec was
merged with and into Sub, with Sub surviving as a wholly-owned
subsidiary of QSI. In connection with the Acquisition, the
shareholders of Clinitec (other than QSI) received an aggregate
of 309,846 shares of QSI Common Stock and $4,896,000 in cash on a
pro rata basis as set forth in the Merger Agreement. In
determining the aggregate purchase price for Clinitec, QSI took
into account the value of software companies of similar industry
and size to Clinitec, comparable transactions, and the market for
software companies generally.
In April 1995, QSI acquired a 25% ownership interest in
Clinitec, and with the completion of the Acquisition acquired the
remaining 75% of Clinitec that it did not own. The shareholders'
vote of Clinitec unanimously approved the Acquisition. In
addition, Sheldon Razin, an officer, director and shareholder of
QSI and a member of the Clinitec Board of Directors, abstained
from the Clinitec Board's vote on the Acquisition.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(a) Financial Statements of Clinitec
Financial statements of Clinitec prepared in
accordance with Regulation S-B and required to be
filed pursuant to this section are not available
at this time. Such financial statements will be
filed by QSI as soon as practicable by an amended
Current Report on Form 8-K which will be filed
within sixty (60) days after the filing of this
Current Report on Form 8-K.
(b) Pro Forma Financial Information
The pro forma financial statements of QSI required
to be filed pursuant to this section are not
available at this time. Such Pro Forma Financial
Information will be filed by QSI as soon as
practicable by an amended Current Report on Form
8-K which will be filed within sixty (60) days
after the filing of this Current Report on Form 8-
K.
(c) Exhibits
2 Agreement and Plan of Merger, dated May 16,
1996, by and among Quality Systems, Inc., CII
Acquisition Corporation, Clinitec
International, Inc., and certain shareholders
of Clinitec, and certain exhibits.
99.1 Text of Press Release dated May 17, 1996.
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.
Date: May 30, 1996 QUALITY SYSTEMS, INC.
/s/ Robert McGraw
Robert McGraw, Chief Financial Officer
INDEX TO EXHIBITS
Exhibit Description Sequentially
Numbered
Page
99.1 Text of Press Release dated May 17, 1996.
2 Agreement and Plan of Merger, dated May
16, 1996, by and among Quality Systems,
Inc., CII Acquisition Corporation,
Clinitec International, Inc., and
certain shareholders of Clinitec, and
certain exhibits.
EXHIBIT 99.1
QSI PRESS RELEASE
Quality Systems, Inc.
Meredith Financial Centre
17822 East 17th Street
Tustin, California 92680
Telephone (714) 731-7171
Fax (714) 731-9494
http://www.aboveall.com/qsi
Date: May 17, 1996
FOR IMMEDIATE RELEASE
Quality Systems, Inc. Completes Merger With Clinitec
International, Inc.
TUSTIN, Calif., May 17, 1996 Quality Systems, Inc. ("QSI")
(NASDAQ: QSII) and Clinitec International, Inc. ("Clinitec"), a
developer of electronic medical records software systems, jointly
announced today that they have completed the merger of the two
companies. Under the merger agreement, Clinitec will operate as a
wholly owned subsidiary of QSI, with Patrick Cline, Clinitec's co-
founder, continuing as President and COO of Clinitec. Mr. Cline
has also been named a director and Executive Vice President of QSI.
Sheldon Razin, QSI's Chairman and CEO, commented, "We are very
pleased to have Clinitec on our team. Clinitec's product NextGen
permits scanning, annotation, retrieval and analysis of medical
records in all formats, from documents to photographs to x-rays.
With the addition of Clinitec, QSI is able to provide its clients
with a comprehensive information management solution."
Clinitec, with headquarters in Horsham, PA, will operate as an
independent unit of QSI and will continue to develop, market and
support NextGen. "We're excited about this opportunity to leverage
QSI's broad financial resources and customer-oriented reputation,"
stated Cline.
In April 1995, QSI acquired a 25% ownership interest in
Clinitec. With the completion of this current transaction, QSI
acquired the remaining 75% that it did not previously own for
approximately $4.9 million in cash and 309,846 shares of QSI common
stock. For purposes of this acquisition, the shares were valued at
$22.25 per share, or $6.9 million, for a total purchase price of
approximately $11.8 million. The transaction will be treated as a
purchase for accounting purposes.
Quality Systems is one of the leading developers and providers
of computer-based practice management and electronic medical
records systems for medical and dental group practices, with a
customer base of more than 475 clients, currently serving
approximately 8 million patients in 45 states, Canada and Saudi
Arabia.