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: September 9, 1997
----------------------------------
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.)
1901 Main Street, Suite 1200, Mail Code 1105, Columbia, South Carolina 29201
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (803) 252-3661
--------------
No Change
(Former name or former address, if changed
since last report.)
This document contains a total of 21 pages.
This Form 8-K/A amends the Form 8-K filed with the Securities and Exchange
Commission on September 15, 1997 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 Leif Martin Adams, D.O., the business
acquired by the wholly-owned subsidiary of the Company, are
included in this report beginning on page number 3.
b) Pro Forma Financial Information
The pro forma financial information for Leif Martin Adams, D.O.,
the business acquired by the wholly-owned subsidiary of the
Company, is included in this report following the financial
information herein in response to Item 7(a) above.
c) Exhibits
The following exhibit is incorporated by reference to the exhibit
of the same number filed with the Company's Form 8-K filed on
September 15, 1997.
Exhibit 2.1 - Asset Purchase Agreement dated and executed on
September 9, 1997, by, between and among UCI Medical Affiliates,
Inc., a Delaware corporation ("UCI"); UCI Medical Affiliates of
South Carolina, Inc., a South Carolina corporation and
wholly-owned subsidiary of UCI ("UCI of SC"), Doctor's Care, P.A.,
a South Carolina professional corporation ("Doctor's Care"); and
Leif Martin Adams, D.O., a South Carolina resident ("Seller").
Report on Audit of the Financial Statements of
Leif Martin Adams, D.O.
as of December 31, 1996 and 1995
Contents
Page
Leif Martin Adams, D.O. Financial Statements
as of December 31, 1996 and 1995......................................5-12
UCI Medical Affiliates, Inc. Pro Forma Combining Financial Statements
Combining Balance Sheet at September 30, 1996...........................13
Notes to Combining Balance Sheet........................................14
Combining Statement of Operations and Accumulated Deficit
for year ended September 30, 1996....................................15
Notes to Combining Statement of Operations..............................16
UCI Medical Affiliates, Inc. Pro Forma Combining Financial Statements
Combining Balance Sheet at June 30, 1997................................17
Notes to Combining Balance Sheet........................................18
Combining Statement of Operations and Accumulated Deficit
for the nine months ended June 30, 1997............................19
Notes to Combining Statement of Operations..............................20
Report of Independent Accountants
Board of Directors
UCI Medical Affiliates, Inc.
We have audited the accompanying balance sheets of Leif Martin Adams, D.O. (the
"Practice") as of December 31, 1996 and 1995 and the related statements of
operations, statements of changes in owner's equity and cash flows for the
periods then ended. These financial statements are the responsibility of the
Practice's management. Our responsibility is to express an opinion on these
financial statements based on our audit.
We conducted our audits 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 audits provide 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 Leif Martin Adams, D.O. as of
December 31, 1996 and 1995, and the results of its operations, changes in
owner's equity and its 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 Leif
Martin Adams, D.O. and do not include the personal accounts of the owner or
those of any other operations in which he may be engaged.
Columbia, South Carolina
October 10, 1997
THE ORIGINAL SIGNED OPINION ON SCOTT, HOLLOWAY & McELVEEN, LLP
LETTERHEAD IS ON FILE WITH UCI MEDICAL AFFILIATES, INC.
Leif Martin Adams, D.O.
Balance Sheets
December 31,
1996 1995
--------------- ----------------
Assets
Current assets:
Cash and cash equivalents $ 1,275 $ 1,687
Accounts receivable, net 36,245 26,221
--------------- ----------------
Total current assets 37,520 27,908
--------------- ----------------
Property, plant and equipment, net 191,838 200,640
Other assets 200 200
--------------- ----------------
192,038 200,840
--------------- ----------------
Total assets $ 229,558 $ 228,748
=============== ================
Liabilities and Owner's Equity Current liabilities:
Accounts payable and accrued expenses $ 2,280 $ 979
Current maturities of long-term debt 25,374 34,238
--------------- ----------------
Total current liabilities 27,654 35,217
Long-term debt, net of current portion 117,048 130,977
--------------- ----------------
Total liabilities 144,702 166,194
--------------- ----------------
Owner's equity
Capital 84,856 62,554
--------------- ----------------
Owner's equity 84,856 62,554
--------------- ----------------
Total liabilities and
owner's equity $ 229,558 $ 228,748
=============== ================
The accompanying notes are an integral part of these financial statements.
Leif Martin Adams, D.O.
Statements of Operations
for the years ended December 31,
1996 1995
------------------ ------------------
Net medical revenue $ 220,934 $ 167,649
Operating costs 89,670 74,216
------------------ ------------------
Operating margin 131,264 93,433
Depreciation and amortization 10,417 11,087
General and administrative expenses 21,600 20,244
------------------ ------------------
Income from operations 99,247 62,102
Interest expense 12,035 15,758
------------------ ------------------
Net income $ 87,212 $ 46,344
================== ==================
The accompanying notes are an integral part of these financial statements.
Leif Martin Adams, D.O.
Statements of Changes in Owner's Equity
for the years ended December 31, 1996 and 1995
Balance, January 1, 1995 $ 63,923
Net income 46,344
Owner's draws (47,713)
------------------
Balance, December 31, 1995 62,554
Net income 87,212
Owner's draws (64,910)
------------------
Balance, December 31, 1996 $ 84,856
==================
The accompanying notes are an integral part of these financial statements.
Leif Martin Adams, D.O.
Statements of Cash Flows
for the years ended December 31,
1996 1995
------------------ ------------------
Operating activities:
Net income $ 87,212 $ 46,344
Adjustments to reconcile net income
to cash provided by
operating activities:
Depreciation and amortization 10,417 11,087
Changes in operating assets and liabilities:
Accounts receivable (10,024) 3,281
Accounts payable and accrued
expenses 1,301 (670)
------------------ ------------------
Cash provided by
operating activities 88,906 60,042
------------------ ------------------
Investing activities:
Purchases of furniture and equipment (1,615) --
------------------ ------------------
Cash used by investing
activities (1,615) --
------------------ ------------------
Financing activities:
Repayments on long-term debt (22,793) (12,330)
Payment of owner's draws (64,910) (47,713)
------------------ ------------------
Cash used by financing
activities (87,703) (60,043)
------------------ ------------------
Decrease in cash and cash equivalents (412) (1)
Cash and cash equivalents, beginning
of year 1,687 1,688
------------------ ------------------
Cash and cash equivalents,
end of year $ 1,275 $ 1,687
================== ==================
Supplemental cash flow information:
Cash paid for interest $ 12,035 $ 15,758
================== ==================
The accompanying notes are an integral part of these financial statements.
Leif Martin Adams, D.O.
Notes to Financial Statements
Note 1. Significant Accounting Policies
Organization - Leif M. Adams, D.O. is the sole owner of Leif Martin Adams, D.O.
(the "Practice") located in Summerville, South Carolina. The Practice operates a
family practice medical office that provides treatments 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 the
Practice and do not include the personal accounts of the owner 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, 1996, 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 collectability and historical
payment percentages.
Property, Plant and Equipment - Property, plant and equipment is reported at
cost. Depreciation for financial reporting purposes is computed principally by
accelerated methods over the estimated useful lives of the assets, which range
from five to seven years. Maintenance, repairs and the cost of minor equipment
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.
Income Taxes - The Practice operates as a sole proprietorship. Under this
election, the revenues and expenses of the Practice are reported on the owner's
personal income tax returns. Accordingly, provision for income tax expense has
not been made in the financial statements.
Cash Equivalents - The Practice 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 payable are estimated by management to approximate their
respective carrying values.
Leif Martin Adams, D.O.
Notes to Financial Statements (Continued)
Note 2. Property, Plant and Equipment
At December 31, 1996 and 1995, property, plant and equipment consisted of the
following:
1996 1995
------------------ ------------------
Land $ 70,000 $ 70,000
Building 139,107 139,107
Furniture and fixtures 40,974 39,130
------------------ ------------------
250,081 248,237
Accumulated depreciation (58,243) (47,597)
------------------ ------------------
Property, plant and equipment, net $ 191,838 $ 200,640
================= ==================
Note 3. Financing Arrangements
A summary of The Practice's financing arrangements at December 31, 1996 and 1995
follows:
1996 1995
------------------ ------------------
Note payable to a bank in monthly
installments of $1,000 plus
accrued interest at 8.75 percent.
In August 1997 all unpaid principal
is due, collateralized by real estate. $ 127,000 $ 138,000
Note payable to a bank in monthly
installments of $326, including
principal and interest at 8.5 percent,
maturing May 1997, collateralized by
computer equipment. 1,749 5,762
Note payable to a bank in monthly
installments of $101, including principal
and interest at 7.64 percent, maturing
January 2000, collateralized by medical
equipment. 3,302 4,224
Line of credit payable to a bank
bearing interest at 8.5 percent,
expiring August 2000, unsecured. 10,371 17,229
------------------ ------------------
Total financial obligations 142,422 165,215
Less current portion of notes payable 15,003 17,009
Line of credit 10,371 17,229
------------------ ------------------
$ 117,048 $ 130,977
================== ==================
Leif Martin Adams, D.O.
Notes to Financial Statements (Continued)
Note 3. Financing Arrangements (continued)
The aggregate maturities of long-term debt as of December 31, 1996, are as
follows:
Maturing during the year ended December 31,
1997 $ 25,114
1998 13,073
1999 13,158
2000 12,077
2001 and thereafter 79,000
------------------
$ 142,422
==================
At December 31, 1996 and 1995, the Practice has unused lines of credit totalling
approximately $8,500 and $1,700, respectively.
Note 4. Related Party Transactions
The owner participates in the medical activities of the Practice. All payments
for services and benefits to the owner are recorded as draws. For the periods
ended December 31, 1996 and 1995, draws paid to the owner totaled $64,910 and
$47,713, respectively.
Note 5. Concentration of Credit Risk
In the normal course of providing health care services, the Practice extends
credit to patients in the Summerville, South Carolina area without requiring
collateral. Each individual's ability to pay balances due the Practice is
assessed and reserves are established to provide for management's estimate of
uncollectable balances. Future revenues of the Practice are largely dependent on
third-party payors and include Medicare and private insurance companies. The
amount of loss the Practice would incur in the event of non-payment by the
counter party is the amount of the patient billing.
Note 6. Contingencies
At December 31, 1996, management is not aware of any pending or threatened
litigation, or unasserted claims against the Practice that could result in
losses, if any, that would be material to the financial statements.
Note 7. Subsequent Event
On September 9, 1997, UCI Medical Affiliates of South Carolina, Inc. ("UCI")
acquired the accounts receivable, certain office and medical equipment and
substantially all the Practice's intangible assets (including patient lists and
goodwill) for $100,000 consisting of $50,000 in restricted common stock of UCI,
the payment of $7,000 in cash immediately at closing, and the execution of an
interest-bearing promissory note for $43,000, maturing approximately thirteen
months after closing. As a condition of the transaction, the owner entered into
a five-year physician services agreement to provide, on average, forty hours per
week of physician services.
UCI Medical Affiliates, Inc.
Pro Forma Combining Balance Sheet
September 30, 1996
(Unaudited)
The following pro forma combining balance sheet is based on the individual
balance sheets of UCI Medical Affiliates, Inc. as of September 30, 1996 per the
Company's Annual Report and Leif Martin Adams, D.O. as of December 31, 1996
appearing in Item 7(a) of this filing. The information has been prepared to
reflect the acquisition by UCI Medical Affiliates, Inc. of Leif Martin Adams,
D.O. 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
Affiliates, Leif Martin Pro Forma Pro Forma
Inc. Adams, D.O. Adjustments Combined
-------------- --------------- --------------- --------------
Assets
Cash and cash equivalents $ 237,684 $ 1,275 $ (7,000) (a)
(1,275) (a) $ 230,684
Accounts receivable - net 4,187,394 36,245 4,223,639
Medical supplies inventory 407,617 -- 407,617
Deferred taxes 197,056 -- 197,056
Prepaids and other assets 441,384 -- 441,384
-------------- --------------- --------------- --------------
Total current assets 5,471,135 37,520 (8,275) 5,500,380
Property, plant and equipment,
net 3,300,048 191,838 (184,356) (a) 3,307,530
Deferred taxes 855,126 -- 855,126
Goodwill 5,828,963 -- 56,273 (a)
(3,752) (b) 5,881,484
Other assets 277,422 200 (200) (a) 277,422
============== =============== =============== ==============
Total assets $ 15,732,694 $ 229,558 $ (140,310) $ 15,821,942
============== =============== =============== ==============
Liabilities and Capital
Current portion - long-term debt
$ 913,749 $ 25,374 $ 40,000 (a)
(25,374) (a) $ 953,749
Accounts payable 1,391,858 756 (756) (a) 1,391,858
Accrued payroll 750,745 -- 750,745
Other accrued liabilities 394,635 1,524 (1,524) (a)
311 (c)
54,000 (d) 448,946
-------------- --------------- --------------- --------------
Total current
liabilities 3,450,987 27,654 66,657 3,545,298
Long-term debt, net of current 4,459,484 117,048 3,000 (a)
(117,048) (a) 4,462,484
--------------
-------------- --------------- --------------- --------------
Total liabilities 7,910,471 144,702 (47,391) 8,007,782
-------------- --------------- --------------- --------------
Common stock 240,390 -- 976 (a) 241,366
Owner's equity -- 84,856 (84,856) (a) --
Paid-in capital 13,732,393 -- 49,024 (a) 13,781,417
Accumulated deficit (6,150,560) -- (58,063) (e) (6,208,623)
-------------- --------------- --------------- --------------
Total capital 7,822,223 84,856 (92,919) 7,814,160
============== =============== =============== ==============
Total liabilities and capital $ 15,732,694 $ 229,558 $ (140,310) $ 15,821,942
============== =============== =============== ==============
UCI Medical Affiliates, Inc.
Notes to Pro Forma Combining Balance Sheet
September 30, 1996
(Unaudited)
1. The pro forma combining balance sheet has been prepared to reflect the
acquisition of Leif Martin Adams, D.O. by UCI Medical Affiliates, Inc. for an
aggregate price of $100,000. The purchase occurred on September 9, 1997. The
combining balance sheet reflects the balances of UCI at September 30, 1996 and
Leif Martin Adams, D.O. at December 31, 1996. Pro forma adjustments are made to
reflect:
(a.) The assets acquired consisted of: The purchase price consisted of:
$ 36,245 Accounts receivable $ 976 Common stock
7,482 Furniture, equipment 49,024 Additional paid-in-capital
56,273 Goodwill 43,000 Note payable
7,000 Cash paid at closing
======= =======
$100,000 $100,000
======= =======
Issuance of 19,513 shares of restricted common stock valued at $50,000 at
estimated per share value of $2.56.
$40,000 of the note payable is recorded as currently due; $3,000 is
recorded as non-current.
Certain cash deposits ($1,275), the building and premises, and certain
furniture and equipment ($184,356) were not acquired. Accounts payable
($756), payroll taxes payable ($1,524), long-term debt ($142,422) and
prior owner's equity ($84,856) were not assumed.
(b.) Excess of acquisition cost over the fair values of net assets acquired
(goodwill) less one year's amortization. ($56,273 goodwill less $3,752
amortization)
(c.) Accrued interest for the one month term of the note payable at 8%
(d.) Net change in fees for physician services is $54,000 annually, based
on the physician's service agreement, and is recorded as an accrued payable.
(e.) Effects of pro forma adjustments on statement of operations, closed
into pro forma retained earnings.
UCI Medical Affiliates, Inc.
Pro Forma Statement of Operations and Accumulated Deficit
for the year ended September 30, 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 September 30, 1996 per the Company's Annual Report and Leif Martin Adams,
D.O. as of December 31, 1996 appearing in item 7(a) of this filing. The
information has been prepared to reflect the acquisition by UCI Medical
Affiliates, Inc. of Leif Martin Adams, D.O. 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 Leif Martin Pro Forma Pro Forma
Affiliates, Inc. Adams, D.O. Adjustments Combined
---------------- -------------- --------------- -----------------
Revenue $ 23,254,351 $ 220,934 -- $ 23,475,285
Operating costs 21,525,421 89,670 54,000 (a.) 21,669,091
---------------- -------------- --------------- -----------------
Operating margin 1,728,930 131,264 (54,000) 1,806,194
General and administrative
expenses 148,637 21,600 -- 170,237
Depreciation and amortization 961,115 10,417 3,752 (b.) 975,284
---------------- -------------- --------------- -----------------
Income from operations 619,178 99,247 (57,752) 660,673
Interest expense, net (582,937) (12,035) (311) (c.) (595,283)
Gain on equipment 2,105 -- -- 2,105
---------------- -------------- --------------- -----------------
Income before income tax 38,346 87,212 (58,063) 67,495
Income tax benefit (expense) 427,733 -- -- 427,733
---------------- -------------- --------------- -----------------
Net (loss) income 466,079 87,212 (58,063) 495,228
Accumulated deficit - beginning
of year (6,616,639) 62,554 -- (6,554,085)
Owner's draws -- (64,910) -- (64,910)
---------------- -------------- --------------- -----------------
Accumulated deficit - end of
year $ (6,150,560) $ 84,856 $ (58,063) $ (6,123,767)
================ ============== =============== =================
Earnings per common and common equivalent share:
Net income $ .11 (d) -- $ .11
================ ============== =============== =================
Weighted average shares of
common stock outstanding 4,294,137 (d) -- 4,313,650
================ ============== =============== =================
UCI Medical Affiliates, Inc.
Note to Pro Forma Combining
Statement of Operations and
Accumulated Deficit for the
year ended September 30, 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 fees based on employment agreement between
Leif Martin Adams, D.O. and UCI Medical Affiliates, Inc.
(b.) Addition for amortization of goodwill on a straight line basis over 15
years.
(c.) Accrued interest on note payable at 8% for one month loan term.
(d.) Not applicable; Leif Martin Adams, D.O. was not required to, and did
not, compute earnings per share.
UCI Medical Affiliates, Inc.
Pro Forma Combining Balance Sheet
June 30, 1997
(Unaudited)
The following pro forma combining balance sheet is based on the individual
balance sheets of UCI Medical Affiliates, Inc. as of June 30, 1997 per the
Company's Form 10QSB and Leif Martin Adams, D.O. as of June 30, 1997. The
information has been prepared to reflect the acquisition by UCI Medical
Affiliates, Inc. of Leif Martin Adams, D.O. 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 Leif Martin Pro Forma Pro Forma
Affiliates, Inc. Adams, D.O. Adjustments Combined
----------------- ----------------- -------------------- -----------------
Assets
Cash and cash equivalents $ 119,538 $ 3,832 $ (7,000) (a)
(3,832) (a) $ 112,538
Accounts receivable - net 5,743,707 9,747 -- 5,753,454
Medical supplies inventory 379,647 -- -- 379,647
Deferred taxes 197,056 -- -- 197,056
Prepaids and other assets 445,636 -- -- 445,636
----------------- ----------------- ------------------ ------------------
Total current assets 6,885,584 13,579 (10,832) 6,888,331
Property, plant and
equipment, net 3,433,218 183,853 (176,371) (a) 3,440,700
Deferred taxes 1,380,126 -- -- 1,380,126
Goodwill 5,720,394 -- 82,771 (a)
(4,139) (b) 5,799,026
Other assets 268,908 200 (200) (a) 268,908
================= ================= ================== ==================
Total assets $ 17,688,230 $ 197,632 $ (108,771) $ 17,777,091
================= ================= ================== ==================
Liabilities and Capital
Current portion - long-term
debt $ 854,903 $ 26,418 $ 40,000 (a) $
(26,418) (a) 894,903
Accounts payable 1,627,827 1,001 (1,001) (a) 1,627,827
Accrued payroll 452,995 -- -- 452,995
Other accrued liabilities 330,679 1,881 2,903 (c)
40,500 (d)
(1,881) (a) 374,082
----------------- ----------------- ------------------ ------------------
Total current
liabilities 3,266,404 29,300 54,103 3,349,807
Long-term debt, net of current
5,659,476 109,467 3,000 (a)
(109,467) (a) 5,662,476
----------------- ----------------- ------------------ ------------------
----------------- ----------------- ------------------ ------------------
Total liabilities 8,925,880 138,767 (52,364) 9,012,283
----------------- ----------------- ------------------ ------------------
Common stock 260,390 -- 976 (a) 261,366
Owner's capital -- 58,865 (58,865) (a) --
Paid-in capital 14,312,393 -- 49,024 (a) 14,361,417
Accumulated (deficit) (5,810,433) -- (47,542) (e) (5,857,975)
----------------- ----------------- ------------------ ------------------
Total capital 8,762,350 58,865 (56,407) 8,764,808
----------------- ----------------- ------------------ ------------------
Total liabilities
and capital $ 17,688,230 $ 197,632 $ (108,771) $ 17,777,091
================= ================= ================== ==================
UCI Medical Affiliates, Inc.
Notes to Pro Forma Combining Balance Sheet
June 30, 1997
(Unaudited)
1. The pro forma combining balance sheet has been prepared to reflect the
acquisition of Leif Martin Adams, D.O. by UCI Medical Affiliates, Inc. for an
aggregate price of $100,000. The purchase occurred on September 9, 1997. The
combining balance sheet reflects the balances of UCI at June 30, 1997, and Leif
Martin Adams, D.O. at June 30, 1997. Pro forma adjustments are made to reflect:
(a.) The assets acquired consisted of: The purchase price consisted of:
$ 9,747 Accounts receivable $ 976 Common stock
7,482 Furniture, equipment 49,024 Additional paid-in-capital
82,771 Goodwill 43,000 Note payable
7,000 Cash paid at closing
======= =======
$100,000 $100,000
======= =======
Issuance of 19,513 shares of restricted common stock valued at $50,000 at
estimated per share value of $2.56.
$40,000 of the note payable is recorded as currently due, $3,000 is
recorded as non-current.
Certain cash deposits ($3,832), land and premises, and certain furniture
and equipment ($176,371) were not acquired. Accounts payable ($1,001),
payroll taxes payable ($1,881), long-term debt ($135,885) and prior
owner's equity ($58,865) were not assumed.
(b.) Excess of acquisition cost over the fair values of net assets acquired
(goodwill) less nine month's amortization. ($82,771 goodwill less $4,139
amortization)
(c.) Accrued interest for nine month term of the note payable at 8%.
(d.) Net change in fee for physician services of $40,500 based on service
agreement for nine months recorded as an accrued payable.
(e.) Effects of pro forma adjustments on statement of operations, closed
into pro forma retained earnings.
UCI Medical Affiliates, Inc.
Pro Forma Combining Statement of
Operations and Accumulated
Deficit for the nine months
ended June 30, 1997
(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 June 30, 1997 per the Company's Form 10QSB and Leif Martin Adams, D.O. as
of June 30, 1997. The information has been prepared to reflect the acquisition
by UCI Medical Affiliates, Inc. of Leif Martin Adams, D.O. after giving effect
to the pro forma adjustments described in Note 1. Information for the nine
months ended June 30, 1997 for Leif Martin Adams, D.O. is estimated since Leif
Martin Adams, D.O. 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 Leif Martin Pro Forma Pro Forma
Affiliates, Inc. Adams, D.O. Adjustments Combined
------------------ ------------------- ------------------ ------------------
Revenue $ 20,299,676 $ 137,043 -- $ 20,436,719
Operating costs 18,876,302 68,016 40,500 (a) 18,984,818
------------------ ------------------- ------------------ ------------------
Operating margin 1,423,374 69,027 (40,500) 1,451,901
General and administrative
expenses 127,881 21,431 -- 149,312
Depreciation and amortization 892,372 7,984 4,139 (b) 904,495
------------------ ------------------- ------------------ ------------------
Income from operations 403,121 39,612 (44,639) 398,094
Interest expense, net (570,951) (12,964) (2,903) (c) (586,818)
Gain on equipment 8,809 -- -- 8,809
------------------ ------------------- ------------------ ------------------
Income(loss) before income tax
(159,021) 26,648 (47,542) (179,915)
Income tax benefit 499,148 -- -- 499,148
------------------ ------------------- ------------------ ------------------
Net income 340,127 26,648 (47,542) 319,233
Accumulated deficit -
beginning of period (6,150,560) 80,900 -- (6,069,660)
Owner's draws -- (48,683) -- (48,683)
------------------ ------------------- ------------------ ------------------
Accumulated deficit - end of
period $ (5,810,433) $ 58,865 $ (47,542) $ (5,799,110)
================== =================== ================== ==================
(f)
Earnings per common and common equivalent share:
Net income $ .07 (d) -- $ .07
================== =================== ================== ==================
(a)
Weighted average shares of (a)
common stock outstanding
4,819,527 (d) -- 4,839,040
================== =================== ================== ==================
UCI Medical Affiliates, Inc.
Note to Pro Forma Combining Statement
of Operations and Accumulated
Deficit for the nine months
ended June 30, 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 fees based on employment agreement between
Leif Martin Adams, D.O. and UCI Medical Affiliates, Inc.
(b.) Addition for nine months amortization of goodwill on a straight line
basis over 15 years.
(c.) Accrued interest on note payable at 8% for nine months.
(d.) Not applicable; Leif Martin Adams, D.O. was not required to, and did
not, compute earnings per share.
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/ Marion F. McFarland, III, M.D. /s/ Jerry F. Wells, Jr.
Marion F. McFarland, III, M.D. Jerry F. Wells, Jr., CPA
President, Chief Executive Officer and Executive Vice President of
Chairman of the Board Finance and Chief Financial Officer
Date: November 19, 1997