SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 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) AUGUST 23, 1995 UCI MEDICAL AFFILIATES, INC. (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER) DELAWARE (STATE OR OTHER JURISDICTION OF INCORPORATION) 0-13265 59-2225346 (COMMISSION FILE NUMBER) (I.R.S. EMPLOYER IDENTIFICATION NO.) 6168 ST. ANDREWS ROAD, COLUMBIA, SC 29210 (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE) (803) 772-8840 (REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE) N/A (FORMER NAME OF FORMER ADDRESS, IF CHANGED SINCE LAST REPORT) THIS DOCUMENT CONTAINS A TOTAL OF 64 PAGES. THE EXHIBIT INDEX IS SET FORTH ON SEQUENTIALLY NUMBERED PAGE 22 . 1 ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS Pursuant to the terms of an Asset Purchase Agreement dated June 23, 1995 and executed August 23, 1995 (the "Contract") by and between Peter G. Manos, M.D. ( the "Seller") and UCI Medical Affiliates of South Carolina, Inc., a South Carolina corporation (the "Company") and the wholly-owned subsidiary of UCI Medical Affiliates, Inc., a Delaware corporation ("UCI"), the Company has acquired certain assets of (including patient list and goodwill) associated with the medical practice owned and operated by the Seller in Greenville, South Carolina for a purchase price of $729,861, consisting of a $350,000 Promissory Note ( the "Note"); 100,000 shares of common stock of "UCI" and the assumption of approximately $67,361 of the Seller's trade accounts payable. The consideration paid by the Company in connection with this acquisition was determined by arms-length negotiations between the Company and the Seller. The practice operated by the Seller was one at which medical conditions not involving an immediate threat to life were treated on an outpatient basis. Currently, the Company expects to continue the operations of the practice in substantially the same manner as they were conducted prior to the acquisition, at one of the Company's locations. The Note bears interest at an annual rate of 9 percent payable monthly in arrears to the Seller. All descriptions of the Asset Purchase Agreement and the Note noted herein are qualified in their entirety by reference to such documents filed as Exhibits to this Current Report on Form 8-K. ITEM 5. OTHER EVENTS The Company wishes to release unaudited earnings of $52,007 for the month ending August 31, 1995 and $30,271 for the month ending July 31, 1995. 2 ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS. (A) FINANCIAL STATEMENTS OF BUSINESS ACQUIRED. The financial statements for Summit Medical Center, the business acquired by the wholly-owned subsidiary of the Company, are included in this report beginning on sequentially number page 4. (B) PRO FORMA FINANCIAL INFORMATION. The pro forma financial information for Surfside Medical Center, 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. Exhibit 2 Asset Purchase Agreement dated June 23, 1995 and executed August 23, 1995 by and between Peter G. Manos, M.D. and UCI Medical Affiliates of South Carolina, Inc. Exhibit 10.1 Promissory Note dated July 1, 1995 and executed August 23, 1995 given by UCI Medical Affiliates of South Carolina, Inc. to Peter G. Manos, MD. 3 UCI Medical Affiliates, Inc. CONTENTS Page Summit Medical Center Financial Statements as of December 31, 1994........................................................................................1-8 UCI Medical Affiliates, Inc. Pro Forma Combining Financial Statements Combining Balance Sheet at September 30, 1994.................................................... 9 Notes to Combining Balance Sheet......................................................................10 Combining Statement of Operations and Accumulated Deficit for year ended September 30, 1994.............................................................11 Notes to Combining Statement of Operations.......................................................12 UCI Medical Affiliates, Inc. Pro Forma Combining Financial Statements Combining Balance Sheet at June 30, 1995.........................................................13 Notes to Combining Balance Sheet.................................................................14 Combining Statement of Operations and Accumulated Deficit for nine months ended June 30, 1995...........................................................15 Notes to Combining Statement of Operations.......................................................16 4 SCOTT & HOLLOWAY, L.L.P. CERTIFIED PUBLIC ACCOUNTANTS Report of Independent Accountants Board of Directors UCI Medical Affiliates, Inc. We have audited the accompanying balance sheets of Summit Medical Center as of December 31, 1994 and 1993 and the related statements of operations, proprietor's capital, and cash flows for the years then ended. These financial statements are the responsibility of the Proprietor's management. Our responsibility is to express an opinion on this financial statement 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 financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statements 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 Summit Medical Center as of December 31, 1994 and 1993 and the results of their operations and their 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 Summit Medical Center and do not include the personal accounts of the proprietor or those of any other operations in which he may be engaged. (Signature of Scott & Holloway, L.L.P.) Columbia, South Carolina July 19, 1995 250 Berryhill Road (bullet) Suite 125 (bullet) Columbia (bullet) South Carolina (bullet) 29210 (bullet) Telephone (803) 731-0880 (bullet) Facsimile (803) 731-2166 5 Summit Medical Center Balance Sheets December 31, 1994 1993 --------- -------- ASSETS Current assets: Cash and cash equivalents ............................ $ 52,313 $ 22,458 Accounts receivable, net ............................. 113,400 58,220 Medical supplies inventory ........................... 8,129 5,768 -------- -------- Total current assets ............................ 173,842 86,446 Office and medical equipment, net ........................ 84,069 90,688 -------- -------- Total assets .................................... $257,911 $177,134 ======== ======== LIABILITIES AND PROPRIETOR'S EQUITY Current liabilities: Current portion of capital lease payable ............. $ 21,961 $ 17,461 Accrued expenses ..................................... 2,309 6,890 -------- -------- Total current liabilities ....................... 24,270 24,351 Long-term portion of capital leases payable .............. 45,400 67,361 -------- -------- Total liabilities ............................... 69,670 91,712 -------- -------- Proprietor's equity ...................................... 188,241 85,422 -------- -------- Total liabilities and proprietor's equity ....... $257,911 $177,134 ======== ======== THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS. 6 Summit Medical Center Statements of Operations and Changes in Proprietor's Equity For the years ended December 31, 1994 1993 --------- --------- Net medical revenue ............................ $ 541,699 $ 423,406 Operating costs ................................ 128,680 108,721 --------- --------- Operating margin ...................... 413,019 314,685 General and administrative expenses ............ 131,914 128,021 Depreciation and amortization .................. 12,449 11,867 --------- --------- Income from operations ................ 268,656 174,797 Interest expense ............................... 20,837 19,800 --------- --------- Net income ............................ 247,819 154,997 Proprietor's equity, beginning of year ......... 85,422 30,425 Proprietor's draws ............................. (145,000) (100,000) --------- --------- Proprietor's equity, end of year ............... $ 188,241 $ 85,422 ========= ========= THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS. 7 Summit Medical Center Statements of Cash Flows For the years ended December 31, 1994 1993 --------- --------- OPERATING ACTIVITIES: Net income ............................................ $ 247,819 $ 154,997 Adjustments to reconcile net income to cash provided by operating activities: Depreciation and amortization ..................... 12,449 11,867 Changes in operating assets and liabilities: Accounts receivable ............................... (55,180) (41,383) Medical supplies inventory ........................ (2,361) 4,682 Accrued expenses .................................. (4,581) 2,025 --------- --------- Cash provided by operating activities ........ 198,146 132,188 INVESTING ACTIVITIES: Purchases of property and equipment ................... (5,830) (3,477) --------- --------- Cash used by investing activities ............ (5,830) (3,477) FINANCING ACTIVITIES: Proprietor draws ...................................... (145,000) (100,000) Payments on capital leases ............................ (17,461) (12,424) --------- --------- Cash used in financing activities ............ (162,461) (112,424) Net increase in cash and cash equivalents ............. 29,855 16,287 Cash and cash equivalents, beginning of year .......... 22,458 6,171 ========= ========= Cash and cash equivalents, end of year ................ $ 52,313 $ 22,458 ========= ========= Supplemental cash flow information: Cash paid for interest ............................ $ 20,837 $ 19,800 ========= ========= THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS. 8 Summit Medical Center Notes to Financial Statements 1. SIGNIFICANT ACCOUNTING POLICIES ORGANIZATION Peter G. Manos, MD is the sole proprietor of Summit Medical Center (the "Company") located in Greenville, South Carolina. The Company operates a family practice medical center 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 Company and do not include the personal accounts of Peter G. Manos, MD or those of any other activities in which he may be engaged. 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. MEDICAL SUPPLIES INVENTORY Inventory consists of medical, radiology and laboratory supplies and are carried at the lower of average cost or market. OFFICE AND MEDICAL EQUIPMENT Depreciation for financial reporting purposes is provided principally by the straight-line method over the estimated useful lives of the assets, ranging from five to ten 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. 9 Summit Medical Center Notes to Financial Statements 1. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) INCOME TAXES Net income from the Company is combined with the income and expenses of the proprietor from other sources and reported in the proprietor's individual federal and state income tax returns. The Company is not a taxpaying entity for purposes of federal and state income taxation, accordingly, provisions for income taxes have not been recorded in the Company's 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 payable are estimated by management to approximate their respective carrying values. 2. OFFICE AND MEDICAL EQUIPMENT Property and equipment of continuing operations consists of the following at December 31: 1994 1993 ------------------- -------------------- Medical equipment $ 81,971 $ 81,971 Office equipment 29,779 23,949 ------------------- -------------------- 111,750 105,920 Less, accumulated depreciation 27,681 15,232 ------------------- -------------------- $ 84,069 $ 90,688 =================== ==================== At December 31, 1994 and 1993, the cost of equipment under capital leases was $101,410 and accumulated amortization thereon was $26,060 and $14,698, respectively. Amortization of assets under capital lease is reported in depreciation and amortization. 10 Summit Medical Center Notes to Financial Statements 3. DESCRIPTION OF LEASING ARRANGEMENTS The Company leases certain medical and office equipment under capital leases expiring at various dates through 1997. At the end of the lease terms, the Company 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, 1994: Year ending December 31, 1995.......................................... $34,342 1996.......................................... 33,118 1997.......................................... 20,038 ------- Total minimum lease payments .......... 87,498 Less: amounts representing interest ........... 20,137 ------- Present value of minimum lease payments 67,361 Current portion of capital lease payable ....... 21,961 ======= Non-current portion of capital leases payable .. $45,400 ======= The Company leases office space under an operating lease expiring in June, 1995. The Company does not intend to renew its lease on the office spaces. Total rental expense was $15,600 and $15,600 for the years ended December 31, 1994 and 1993, respectively. 4. RELATED PARTY TRANSACTIONS Peter G. Manos, MD, the sole proprietor, participates in the medical activities of the Company. All payments for services and benefits to Peter G. Manos, MD are recorded as proprietor draws in the financial statements. 11 Summit Medical Center Notes to Financial Statements 5. CONCENTRATION OF CREDIT RISK In the normal course of providing health care services, the Company extends credit to patients without requiring collateral. Each individual's ability to pay balances due the Company is assessed and reserves are established to provide for management's estimate of uncollectable balances. Future revenues of the Company are largely dependent on third-party payors and include Medicare and private insurance companies. The amount of loss the Company would incur in the event of non-payment by the counter party is the national amount of the patient billing. 6. SUBSEQUENT EVENT In July, 1995, UCI Medical Affiliates of South Carolina, Inc. ("UCI") entered into a definitive agreement to acquire all the office and medical equipment and substantially all the Company's tangible personal property (including patient lists and goodwill) for $729,861 consisting of $312,500 in restricted common stock of UCI, the assumption of certain lease liabilities and a 27 month Promissory Note for $350,000. The Promissory Note bears interest at nine (9) percent. As a condition of the above transaction, Peter G. Manos, MD entered into a 10 year employment agreement with UCI. 12 UCI Medical Affiliates, Inc. Pro Forma Combining Balance Sheet September 30, 1994 (Unaudited) The following pro forma combining balance sheet is based on the individual balance sheets of UCI Medical Affiliates, Inc. as of September 30, 1994 per the Company's Annual Report and Summit Medical Center as of December 31, 1994 appearing in item 7a of this filing. The information has been prepared to reflect the acquisition by UCI Medical Affiliates, Inc. of Summit Medical Center 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, Summit Medical Pro Forma Pro Forma Inc Center Adjustments Combined ----------- ----------- ----------- ----------- ASSETS Cash and cash equivalents .................................. $ 210,286 $ 52,313 $ (52,313)(b) $ 95,886 (114,400)(a) Accounts receivable - net .................................. 1,508,514 113,400 (113,400)(b) 1,508,514 Medical supplies inventory ................................. 217,076 8,129 -- 225,205 Deferred taxes ............................................. 491,543 -- -- 491,543 Prepaids and other assets .................................. 111,149 -- -- 111,149 Goodwill ................................................... 2,651,245 -- 595,153 (c) 3,246,398 Property, plant and equipment, net .......................................... 1,098,310 84,069 -- 1,182,379 Deferred taxes ............................................. 120,639 -- -- 120,639 Other assets ............................................... 265,531 -- -- 265,531 =========== =========== =========== =========== Total assets ...................................... $ 6,674,293 $ 257,911 $ 315,040 $ 7,247,244 =========== =========== =========== =========== LIABILITIES Current portion - long-term debt .................................................... $ 542,564 $ -- $ 131,341(d) $ 673,905 Current portion - capital lease ................................................... -- 21,961 -- 21,961 Accounts payable ........................................... 467,371 -- -- 467,371 Accrued payroll ............................................ 204,601 -- -- 204,601 Other accrued liabilities .................................. 458,782 2,309 (2,309)(b) 458,782 Accrued payroll taxes ...................................... 103,011 -- 103,011 Long-term debt - net of current ................................................. 2,295,197 -- 163,081 (d) 2,458,278 Capital lease - net of current ................................................. -- 45,400 -- 45,400 Proprietor's equity ........................................ -- 188,241 (188,241)(e) -- Common stock ............................................... 131,109 -- 5,000 (f) 136,109 Paid-in capital ............................................ 7,728,554 -- 307,500 (f) 8,036,054 Accumulated deficit ........................................ (5,256,896) -- (101,332)(e) (5,358,228) =========== =========== =========== =========== Total liabilities ................................. $ 6,674,293 $ 257,911 $ 315,040 $ 7,247,244 =========== =========== =========== =========== 13 UCI Medical Affiliates, Inc. Notes to Pro Forma Combining Balance Sheet September 30, 1994 (Unaudited) 1. The pro forma combining balance sheet has been prepared to reflect the acquisition of Summit Medical Center by UCI Medical Affiliates, Inc. for an aggregate price of $729,861. The purchase occurred on August 25, 1995. The combining balance sheet reflects the year ended September 30, 1994. Pro forma adjustments are made to reflect: (a.) A net increase as a result of the following: $ 145,000 partner draws not required 15,600 decrease in rent payments (200,000) increase in physician salaries (75,000) three cash payments before closing ------------------- $ (114,400) =================== (b.) Proprietor's cash ($52,313), accounts receivable ($113,400) and accrued expenses ($2,309) were not acquired. (c.) Excess of acquisition cost over the values of net assets acquired (goodwill) less one year's amortization. ($637,663 goodwill less $42,510 amortization) (d.) Issuance of long-term debt necessary to complete the acquisition less the first year's principal payments. ($275,000 loan plus $19,422 interest less $131,341 principal reduction) (e.) Changes in proprietor's deficit as a result of adjustments on pro forma statement of operations. (f.) Issuance of 100,000 restricted common shares valued at $312,500 based on a per-share value of $3.125. 14 UCI Medical Affiliates, Inc. Pro Forma Statement of Operations and Accumulated Deficit for the year ended September 30, 1994 (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, 1994 per the Company's Annual Report and Summit Medical Center as of December 31, 1994 appearing in item 7a of this filing. The information has been prepared to reflect the acquisition by UCI Medical Affiliates, Inc. of Summit Medical Center 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, Summit Medical Pro Forma Pro Forma Inc. Center Adjustments Combined ------------ --------------- --------------- ------------- Revenue ........................................ $ 12,540,040 $ 541,699 $ -- $ 13,081,739 Operating costs ................................ 11,880,508 128,680 200,000 (a) 12,209,188 ------------ ------------ ------------ ------------ Operating margin ............................... 659,532 413,019 (200,000) 872,551 General and administrative expenses .................................... 74,698 131,914 (15,600)(c) 191,012 Depreciation and amortization ................................ 319,554 12,449 42,510 (b) 374,513 ------------ ------------ ------------ ------------ Income from operations ......................... 265,280 268,656 (226,910) 307,026 Interest ....................................... 164,182 20,837 19,422 (d) 204,441 Loss on equipment .............................. 68,892 -- -- 68,892 ------------ ------------ ------------ ------------ Income before income tax ....................... 32,206 247,819 (246,332) 33,693 Benefit for income taxes ....................... 612,182 -- -- 612,182 ------------ ------------ ------------ ------------ Net income ..................................... 644,388 247,819 (246,332) 645,875 Accumulated deficit - beginning of year ........................... (5,901,284) 85,422 -- (5,815,862) Proprietor draws less contributions ............................... -- (145,000) (145,000)(e) -- ------------ ------------ ------------ ------------ Accumulated deficit - end of year ..................................... $ (5,256,896) $ 188,241 $ (101,332) $ (5,169,987) ============ ============ ============ ============ Earnings per common and common equivalent share: Net income ................................. $ .28 (f) $ .27 ============ ============ ============ ============ Weighted average shares of common stock outstanding..................... 2,324,241 (f) 2,424,241 ============ ============ ============ ============ 15 UCI Medical Affiliates, Inc. Note to Pro Forma Combining Statement of Operations and Accumulated Deficit for the year ended September 30, 1994 (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) Additional physician salary based on employment contract between the Summit Medical Center owner and UCI Medical Affiliates, Inc. (b) Addition for amortization of goodwill on a straight line basis over 15 years. (c) Rent expense decrease because the lease on office space occupied by Summit Medical Center was not renewed (d) Additional interest charges on the $275,000 debt issued estimated 9% (e) Proprietor draws not present under new contract (f) Not applicable, organization was a sole proprietorship 16 UCI Medical Affiliates, Inc. Pro Forma Combining Balance Sheet June 30, 1995 (Unaudited) The following pro forma combining balance sheet is based on the individual balance sheets of UCI Medical Affiliates, Inc. as of June 30, 1995 per the Form 10QSB and Summit Medical Center as of December 31, 1994 appearing in item 7a of this filing. This information has been prepared to reflect the acquisition by UCI Medical Affiliates, Inc. of Summit Medical Center 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, Summit Medical Pro Forma Pro Forma Inc. Center Adjustments Combined --------------- --------------- -------------- -------------- ASSETS Cash and cash equivalents ............. $ -- $ 52,313 $ (52,313)(b) $ -- Accounts receivable - net ................... 2,069,758 113,400 (113,400)(b) 2,069,758 Medical supplies inventory ............... 249,089 8,129 -- 257,218 Deferred taxes ............ 491,543 -- -- 491,543 Prepaids and other assets .................. 211,726 -- -- 211,726 Property, plant and equipment, net ......... 2,338,426 84,069 -- 2,422,495 Deferred taxes ............ 120,639 -- -- 120,639 Goodwill, net ............. 2,964,066 -- 605,780 (c) 3,569,846 Other assets .............. 258,485 -- -- 258,485 =========== =========== =========== =========== Total assets ..... $ 8,703,732 $ 257,911 $ 440,067 $ 9,401,710 =========== =========== =========== =========== LIABILITIES Current portion - long-term debt ................... $ 1,013,241 $ -- $ 131,341 (d) $ 1,144,582 Current portion - capital lease .................. -- 21,961 -- 21,961 Accounts payable .......... 1,312,800 -- 114,400 (a) 1,427,200 Accrued salary ............ 262,323 -- -- 262,323 Other accrued liabilities ............. 420,326 2,309 (2,309)(b) 420,326 Long-term debt - net of ... -- current ................ 2,845,435 148,375(d) 2,983,265 Capital lease - net of current ................ -- 45,400 -- 45,400 Proprietor's equity ....... -- 188,241 (188,241)(e) -- Common stock .............. 170,108 -- 5,000 (f) 175,108 Paid-in capital ........... 9,380,556 -- 307,500 (f) 9,688,056 Accumulated deficit ....... (6,701,057) -- (75,999)(e) (6,766,511) =========== =========== =========== =========== Total liabilities.... $ 8,703,732 $ 257,911 $ 440,067 $ 9,401,710 =========== =========== =========== =========== 17 UCI Medical Affiliates, Inc. Notes to Pro Forma Combining Balance Sheet June 30, 1995 (Unaudited) 1. The pro forma combining balance sheet has been prepared to reflect the acquisition of Summit Medical Center by UCI Medical Affiliates, Inc. for an aggregate price of $729,861. Pro forma adjustments are made to reflect: (a) A net increase as a result of the following: $ 145,000 partner draws not required 15,600 decrease in rent payments (200,000) increase in physician salaries (75,000) three cash payments before closing ------------------- $ (114,400) =================== (b.) Proprietor's cash ($52,313), accounts receivable ($113,400) and accrued expenses ($2,309) were not acquired. (c.) Excess of acquisition cost over the values of net assets acquired (goodwill) less one year's amortization. ($637,663 goodwill less $31,883 amortization) (d.) Issuance of long-term debt necessary to complete the acquisition less the first year's principal payments. ($275,000 loan plus $14,566 interest less $131,341 principal reduction) (e.) Changes in proprietor's deficit as a result of adjustments on pro forma statement of operations. (f.) Issuance of 100,000 restricted common shares valued at $312,500 based on a per-share value of $3.125. 18 UCI Medical Affiliates, Inc. Pro Forma Statement of Operations and Accumulated Deficit for the nine months ended June 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. for the nine months ended June 30, 1995 and Summit Medical Center for the nine months ended December 31, 1994. The information has been prepared to reflect the acquisition by UCI Medical Affiliates, Inc. of Summit Medical Center after giving effect to the pro forma adjustments described in Note 1. Information for the nine months ended December 31, 1994 for Summit Medical Center is estimated since Summit 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 Affiliates, Summit Medical Pro Forma Pro Forma Inc. Center Adjustments Combined --------------- -------------- --------------- ----------- Revenue ........................................ $ 12,825,971 $ 406,274 $ -- $ 13,232,245 Operating costs ................................ 13,518,719 96,510 150,000 (a) 13,765,229 ------------ ------------ ------------ ------------ Operating margin ............................... (692,748) 309,764 (150,000) (532,984) General and administrative expenses .................................... 56,725 98,935 (11,700)(c) 143,960 Depreciation and amortization ................................ 393,205 9,337 31,883 (b) 434,425 ------------ ------------ ------------ ------------ Income from operations ......................... (1,142,678) 201,492 (170,183) (1,111,369) Interest expense, net of interest income ............................. 301,483 15,628 14,566 (d) 331,677 ------------ ------------ ------------ ------------ Net income ..................................... (1,444,161) 185,864 (184,749) (1,443,046) Accumulated deficit - beginning of period ......................... (5,256,896) 121,672 -- (5,135,224) Proprietor's draws ............................. -- (108,750) (108,750)(e) -- ------------ ------------ ------------ ------------ Accumulated deficit - end of period ................................... $ (6,701,057) $ 198,786 $ (75,999) $ (6,578,270) ============ ============ ============ ============ Earnings per common and common equivalent share: Net income ................................. $ (.48) (f) $ (.46) ============ ============ ============ ============ Weighted average shares of common stock outstanding..................... 3,031,478 (f) 3,131,478 ============ ============ ============ ============ 19 UCI Medical Affiliates, Inc. Note to Pro Forma Combining Statement of Operations and Accumulated Deficit for the nine months ended June 31, 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) Additional physician salary based on employment contract between the Summit Medical Center owner and UCI Medical Affiliates, Inc. (b) Addition for amortization of goodwill on a straight line basis over 40 years. (c) Rent expense decrease because the lease on office space occupied by Summit Medical Center was not renewed (d) Additional interest charges on the $275,000 debt issued estimated 9% (e) Proprietor draws not present under new contract (f) Not applicable, organization was a sole proprietorship 2. UCI Medical Affiliates, Inc. has available net operating losses for federal and state purposes, which may be applied against future taxable income. 20 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. Date: September 25, 1995 By: (Signature of M.F. McFarland, III) M.F. McFarland, III President By: (Signature of Jerry F. Wells, Jr.) Jerry F. Wells, Jr. Chief Financial Officer 21 EXHIBIT INDEX Sequentially Numbered Page Exhibit 2 Asset Purchase Agreement dated June 23, 1995 and executed August 23, 1995 by and between Peter G. Manos, M.D. and UCI Medical Affiliates of South Carolina, Inc. ..................................................................... 23 Exhibit 10.1 Promissory Note dated July 1, 1995 given by and executed August 23, 1995 UCI Medical Affiliates of South Carolina, Inc. to Peter G. Manos, M.D. ............................................... 60 22