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: June 11, 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.) 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. Page 1 of 21 This Form 8-K/A amends the Form 8-K filed with the Securities and Exchange Commission on June 21, 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 Wateree Emergency Specialists, P.A., 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 Wateree Emergency Specialists, 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. 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 June 21, 1996. Exhibit 2.1 - Asset Purchase Agreement and Plan of Reorganization dated and executed on June 11, 1996 by and between Wateree Emergency Specialists, P.A. and UCI Medical Affiliates of South Carolina, Inc. Page 2 of 21 Report on Audit of the Financial Statements of Wateree Emergency Specialists, P.A. as of December 31, 1995 and 1994 Page 3 of 21 CONTENTS Page Wateree Emergency Specialists, P.A. Financial Statements as of December 31, 1995 and 1994................................................6-12 UCI Medical Affiliates, Inc. Pro Forma Combining Financial Statements Combining Balance Sheet at September 30, 1995.....................................13 Notes to Combining Balance Sheet..................................................14 Combining Statement of Operations and Accumulated Deficit for year ended September 30, 1995..........................................15 Notes to Combining Statement of Operations........................................16 UCI Medical Affiliates, Inc. Pro Forma Combining Financial Statements Combining Balance Sheet at June 30, 1996..........................................17 Notes to Combining Balance Sheet..................................................18 Combining Statement of Operations and Accumulated Deficit for the six months ended June 30, 1996...........................................19 Notes to Combining Statement of Operations........................................20 Page 4 of 21 Report of Independent Accountants Board of Directors UCI Medical Affiliates, Inc. We have audited the accompanying balance sheets of Wateree Emergency Specialists, P.A. (the "Company") as of December 31, 1995 and 1994 and the related statements of operations and retained earnings, and cash flows for the periods 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 Wateree Emergency Specialists, P.A. as of December 31, 1995 and 1994, and the results of its operations 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 Wateree Emergency Specialists, P.A. and do not include the personal accounts of the stockholders or those of any other operations in which they may be engaged. THE ORIGINAL SIGNED OPINION LETTER IS ON FILE WITH UCI MEDICAL AFFILIATES, INC. Columbia, South Carolina August 9, 1996 Page 5 of 21 Wateree Emergency Specialists, P.A. Balance Sheets December 31, 1995 1994 ASSETS Current assets: $ Cash and cash equivalents -- 1,675 Accounts receivable, net 14,322 12,315 ------- ------- Total current assets 14,322 13,990 ------- ------- Furniture and equipment, net 17,151 21,730 Other assets 3,479 500 ------- ------- 20,630 22,230 ------- ------- Total assets $34,952 $36,220 ======= ======= LIABILITIES AND STOCKHOLDER'S EQUITY Current liabilities: Accounts payable and accrued expenses $19,702 $ 7,550 Note payable to shareholder 6,063 6,063 Line of credit payable -- 4,337 Due to affiliated company -- 361 ------- ------- Total current liabilities 25,765 18,311 ------- ------- Stockholder's equity Capital stock, no par value; 100,000 shares authorized; 3,000 shares issued and outstanding 3,000 3,000 Retained earnings 6,187 14,909 ------- ------- Stockholder's equity 9,187 17,909 ------- ------- Total liabilities and stockholder's equity $34,952 $36,220 ======= ======= The accompanying notes are an integral part of these financial statements. Page 6 of 21 Wateree Emergency Specialists, P.A. Statements of Operations and Retained Earnings for the years ended December 31, 1995 1994 ---------- --------- Net medical revenue $ 674,195 $ 580,492 Operating costs 622,491 498,696 --------- --------- Operating margin 51,704 81,796 Depreciation and amortization 7,080 7,637 General and administrative expenses 52,884 51,024 --------- --------- Income (loss) from operations (8,260) 23,135 Interest expense 462 920 --------- --------- Net (loss) income (8,722) 22,215 Retained earnings, beginning of year 14,909 (7,306) --------- --------- Retained earnings, end of year $ 6,187 $ 14,909 ========= ========= The accompanying notes are an integral part of these financial statements. Page 7 of 21 Wateree Emergency Specialists, P.A. Statements of Cash Flows for the years ended December 31, 1995 1994 --------- -------- OPERATING ACTIVITIES: Net (loss) income $ (8,722) $ 22,215 Adjustments to reconcile net income to cash provided (used) by operating activities: Depreciation and amortization 7,080 7,637 Changes in operating assets and liabilities: Accounts receivable (2,007) (2,460) Other assets (2,979) -- Due to related party (361) -- Accounts payable and accrued expenses 12,153 (1,662) -------- -------- Cash provided by operating activities 5,164 25,730 -------- -------- INVESTING ACTIVITIES: Purchases of furniture and equipment (2,502) (12,106) -------- -------- Cash used by investing activities (2,502) (12,106) -------- -------- FINANCING ACTIVITIES: Repayments on line of credit (4,337) (12,439) -------- -------- Cash used by financing activities (4,337) (12,439) -------- -------- Net increase (decrease) in cash and cash equivalents (1,675) 1,185 Cash and cash equivalents, beginning of year 1,675 490 ======== ======== Cash and cash equivalents, end of year $ -- $ 1,675 ======== ======== Supplemental cash flow information: Cash paid for interest $ 462 $ 920 ======== ======== The accompanying notes are an integral part of these financial statements. Page 8 of 21 Wateree Emergency Specialists, P.A. Notes to Financial Statements 1. SIGNIFICANT ACCOUNTING POLICIES ORGANIZATION Elaine B. Baxley, M.D., Ronald P. Hargrave, M.D., and Guy B. Kahler, M.D. are joint and equal stockholders of Wateree Emergency Specialists, P.A. (the "Company") located in Lugoff, South Carolina. The Company commenced operations in April 1989 and conducts business under the name Wateree Medical Center. The Company 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 Company and do not include the personal accounts of the stockholders or those of any other activities in which they 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 collectability and historical payment percentages. FURNITURE AND EQUIPMENT Furniture 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. Page 9 of 21 Wateree Emergency Specialists, P.A. Notes to Financial Statements 1. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) INCOME TAXES The company has elected S Corporation status as is provided by the Internal Revenue Code. Under this election, the revenues and expenses of the Company are reported on the personal income tax returns of the shareholders. Accordingly, provision for income tax expense has not been made in the 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. The fair value of the non-interest bearing demand note payable to a shareholder is estimated by management to be negligible. 2. DESCRIPTION OF LEASING ARRANGEMENTS The Company leases certain minor medical and office equipment under operating lease arrangements. The company leases its office space under a month-to-month operating lease executed with an entity owned by the Company's stockholders. Total rental expense was $32,239 and $26,501 for the year ended December 31, 1995 and 1994, respectively. Page 10 of 21 Wateree Emergency Specialists, P.A. Notes to Financial Statements 3. FURNITURE AND EQUIPMENT At December 31, 1995 and 1994, furniture and equipment consisted of the following: 1995 1994 -------- -------- Office and medical equipment $ 34,253 $ 32,697 Furniture and fixtures 12,892 11,947 Leasehold improvements 2,650 2,650 -------- -------- 49,795 47,294 Accumulated depreciation (32,644) (25,564) -------- -------- Furniture and equipment, net $ 17,151 $ 21,730 ======== ======== 4. RELATED PARTY TRANSACTIONS The stockholders participate in the medical activities of the Company. All payments for services and benefits to the stockholders are recorded as commissions and are included in cost of operations in the financial statements. For the periods ended December 31, 1995 and 1994, commissions paid to the stockholders totaled $183,091 and $137,184, respectively. At December 31, 1995 and 1994, the company was indebted to the stockholders in the amount of $6,063 and $6,063, respectively, on a non-interest bearing demand basis. The Company leases its office facility from an affiliated entity (Note 2). 5. CONCENTRATION OF CREDIT RISK In the normal course of providing health care services, the Company extends credit to patients in the Lugoff, South Carolina area 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 amount of the patient billing. 6. CONTINGENCIES At December 31, 1995, management and its legal counsel are not aware of any pending or threatened litigation, or unasserted claims against the Company that could result in losses, if any, that would be material to the financial statements. Page 11 of 21 Wateree Emergency Specialists, P.A. Notes to Financial Statements 7. SUBSEQUENT EVENT On June 11, 1996 UCI Medical Affiliates of South Carolina, Inc. ("UCI") acquired the cash, accounts receivable, certain office and medical equipment and substantially all the Company's intangible assets (including patient lists and goodwill) for $675,000 consisting of $600,000 in restricted common stock of UCI, the payment of $15,000 in cash immediately at closing, and the execution of an interest-bearing promissory note for $60,000, maturing approximately four months after closing. UCI entered into an agreement with the Company's shareholders to lease the present office space for a term of fifteen years at an annual rate of $46,620. As a condition of the transaction, the stockholders, operating as Emergency Medicine Specialists, P.A., entered into a two-year physician services agreement to provide, on average, sixty hours per week of physician services. Page 12 of 21 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 Wateree Emergency Specialists, 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 Wateree Emergency Specialists, 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 Wateree Affiliates, Inc. Emergency Pro Forma Pro Forma Specialists, P.A. Adjustments Combined ------------------ -------------- ------------- ------------- ASSETS Cash and cash equivalents $ 76,513 $ (15,000)(a) $ 61,513 Accounts receivable - net 2,343,325 14,322 2,357,647 Medical supplies inventory 265,068 265,068 Deferred taxes 491,543 491,543 Prepaids and other assets 282,060 282,060 Goodwill 3,578,371 643,527(a) 4,178,996 (42,902)(b) Property, plant and equipment, net 2,795,384 17,151 2,812,535 Deferred taxes 120,639 120,639 Other assets 262,768 3,479 (3,479)(a) 262,768 ============ ============ ============ ============ Total assets $ 10,215,671 $ 34,952 $ 582,146 $ 10,832,769 ============ ============ ============ ============ LIABILITIES AND CAPITAL Current portion - long-term debt $ 1,244,603 $ 6,063 $ 53,937(a) $ 1,304,603 Accounts payable 1,652,792 14,180 86,000(d) 1,738,792 (14,180)(a) Accrued payroll 498,791 498,791 Other accrued liabilities 445,362 5,522 (5,522)(a) 446,491 1,129(c) Long-term debt, net of current 3,121,098 3,121,098 Common stock 175,408 3,000 (3,000)(a) 181,667 6,259(a) Paid-in capital 9,694,256 593,741(a) 10,287,997 Accumulated earnings (deficit) (6,616,639) 6,187 (6,187)(a) (6,746,670) (130,031)(e) ============ ============ ============ ============ Total liabilities and capital $ 10,215,671 $ 34,952 $ 582,146 $ 10,832,769 ============ ============ ============ ============ Page 13 of 21 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 Wateree Emergency Specialists, P.A. by UCI Medical Affiliates, Inc. for an aggregate price of $675,000. The purchase occurred on June 11, 1996. The combining balance sheet reflects the balances of UCI at September 30, 1995 and Wateree Emergency Specialists, P.A. at December 31, 1995. Pro forma adjustments are made to reflect: (a.) The assets acquired consisted of: The purchase price consisted of: $ 14,322 Accounts receivable $ 6,259 Common stock 17,151 Furniture, equipment 593,741 Additional paid-in-capital 643,527 Goodwill 60,000 Note payable 15,000 Cash paid at closing =========== =========== $675,000 $ 675,000 =========== =========== Issuance of restricted common shares valued at $600,000 at estimated per share value of $3.47. Certain deposits ($500) and amounts due from others ($2,979) were not acquired. Accounts payable ($14,180), payroll taxes payable ($5,522) and shareholder note payable ($6,063) were not assumed. (b.) Excess of acquisition cost over the fair values of net assets acquired (goodwill) less one year's amortization. ($643,527 goodwill less $42,902 amortization) (c.) Accrued interest for the four month term of the note payable at 9% (d.) Net change in fees for physician services is $86,000 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. Page 14 if 21 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 Wateree Emergency Specialists, 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 Wateree Emergency Specialists, 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 Wateree Emergency Pro Forma Pro Forma Affiliates, Inc. Specialists, P.A Adjustments Combined ----------------- ------------------ ----------- -------------- Revenue $ 17,987,147 $ 674,195 $ $ 18,661,342 Operating costs 18,180,080 622,491 86,000(a) 18,888,571 ------------ ------------ ------------ ------------ Operating margin (192,933) 51,704 (86,000) (227,229) General and administrative expenses 87,616 52,884 140,500 Depreciation and amortization 579,224 7,080 42,902(b) 629,206 ------------ ------------ ------------ ------------ Loss from operations (859,773) (8,260) (128,902) (996,935) Interest expense, net 505,459 462 1,129(c) 507,050 Gain on equipment 5,493 5,493 ------------ ------------ ------------ ------------ Loss before income tax (1,359,739) (8,722) (130,031) (1,498,492) Income tax expense (benefit) -- ------------ ------------ ------------ ------------ Net (loss) income (1,359,739) (8,722) (130,031) (1,498,492) Accumulated deficit - beginning of year (5,256,896) (5,248,178) ------------ ------------ ------------ ------------ Accumulated deficit - end of year $ (6,616,639) $ $ $ (6,746,670) ============ ============ ============ ============ Earnings per common and common equivalent share: Net income $ (.43) (d) $ (.45) ============ ============ ============ ============ Weighted average shares of common stock outstanding 3,136,544 3,309,132 ============ ============ ============ ============ Page 15 of 21 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 Wateree Emergency Specialists 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 9% for four month loan term. (d.) Not applicable; Wateree Emergency Specialists, P.A. was not required to, and did not, compute earnings per share. Page 16 of 21 UCI Medical Affiliates, Inc. Pro Forma Combining Balance Sheet June 30, 1996 (Unaudited) The following pro forma combining balance sheet is based on the individual balance sheets of UCI Medical Affiliates, Inc. as of June 30, 1996 per the Company's Form 10QSB and Wateree Emergency Specialists, P.A. as of December 31, 1995 appearing in Item 7(a) of this filing. The information has been prepared to reflect the acquisition by UCI Medical Affiliates, Inc. of Wateree Emergency Specialists, 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. Wateree UCI Medical Emergency Pro Forma Pro Forma Affiliates, Inc. Specialists, P.A. Adjustments Combined ------------------ ------------- --------------- -------------- ASSETS Cash and cash equivalents $ - $ - $ $ - Accounts receivable - net 3,719,712 14,322 3,734,034 Medical supplies inventory 267,356 267,356 Deferred taxes 301,146 301,146 Prepaids and other assets 393,056 393,056 Goodwill 5,901,923 643,527 (a) 6,513,188 (32,262) (b) Property, plant and equipment, net 3,001,552 17,151 3,018,703 Deferred taxes 486,036 486,036 Other assets 271,013 3,479 (3,479) (a) 271,013 =============== ============= ============== ================ Total assets $ 14,341,794 $ 34,952 $ 607,786 $ 14,984,532 =============== ============= ============== ================ LIABILITIES AND CAPITAL Current portion - long-term debt $ 1,720,302 $ 6,063 $ 53,937 (a) $ 1,780,302 Accounts payable 1,419,726 14,180 (14,180) (a) 1,499,226 15,000 (a) 64,500 (d) Accrued payroll 225,933 (b) 225,933 Other accrued liabilities 260,712 5,522 (5,522) (a) 261,841 1,129 (c) Long-term debt, net of current 2,910,388 2,910,388 (3,000) (b) Common stock 240,375 3,000 6,259 (a) 246,634 Paid-in capital 13,732,333 593,741 (a) 14,326,074 Accumulated earnings (deficit) (6,167,975) 6,187 (97,891) (e) (6,265,866) (6,187) (a) =============== ============= ============== ============ Total liabilities and capital $ 14,341,794 $ 34,952 $ (607,786) $ 14,984,532 =============== ============= ============== ============= Page 17 of 21 UCI Medical Affiliates, Inc. Notes to Pro Forma Combining Balance Sheet June 30, 1996 (Unaudited) 1. The pro forma combining balance sheet has been prepared to reflect the acquisition of Wateree Emergency Specialists, P.A. by UCI Medical Affiliates, Inc. for an aggregate price of $675,000. The purchase occurred on June 11, 1996. The combining balance sheet reflects the balances of UCI at June 30, 1996 and Wateree Emergency Specialists, P.A. at December 31, 1995. Pro forma adjustments are made to reflect: (a.) The assets acquired consisted of: The purchase price consisted of: $ 6,259 Common stock $ 14,322 Accounts receivable 593,741 Additional paid-in-capital 17,151 Furniture , equipment 60,000 Note payable 643,527 Goodwill 15,000 Cash paid at closing ================ ================ $ 675,000 $ 675,000 ================ ================ Issuance of restricted common shares valued at $600,000 at estimated per share value of $3.47. Certain deposits ($500) and amounts due from others ($2,979) were not acquired. Accounts payable ($14,180), payroll taxes payable ($5,522) and shareholder note payable ($6,063) were not assumed. (b.) Excess of acquisition cost over the fair values of net assets acquired (goodwill) less nine month's amortization. ($643,527 goodwill less $32,262 amortization) (c.) Accrued interest for four month term of the note payable at 9%. (d.) Net change in fee for physician services of $86,000 annually based on service agreement for nine months recorded as an accrued payable. (e.) Effects of pro forma adjustments on statement of operations. Page 18 of 21 UCI Medical Affiliates, Inc. Pro Forma Statement of Operations and Accumulated Deficit for the nine months ended June 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 June 30, 1996 per the Company's Form 10QSB and Wateree Emergency Specialists, P.A. as of December 31, 1995 appearing in Item 7(a) of this filing. The information has been prepared to reflect the acquisition by UCI Medical Affiliates, Inc. of Wateree Emergency Specialists, P.A. after giving effect to the pro forma adjustments described in Note 1. Information for the nine months ended June 30, 1996 for Wateree Emergency Specialists, P.A. is estimated since Wateree Emergency Specialists, P.A. 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 Wateree Medical Emergency Pro Forma Pro Forma Affiliates, Ic. Specialists, P.A. Adjustments Combined -------------- ----------------- ----------- -------------- Revenue $ 17,003,582 $ 505,647 $ $ 17,509,229 Operating costs 15,513,107 466,869 64,500 (a) 16,044,476 -------------- ------------- --------------- -------------- Operating margin 1,490,475 38,778 (64,500) 1,464,753 General and administrative expenses 90,364 39,663 32,262 (b) 162,289 Depreciation and amortization 687,819 5,310 693,129 -------------- ------------- --------------- -------------- Income from operations 712,292 (6,195) (96,762) 609,335 Interest expense, net 427,327 347 1,129 (c) 428,803 Gain on equipment (2,105) (2,105) -------------- ------------- --------------- -------------- Income before income tax 287,070 (6,542) (97,891) 182,637 Income tax benefit 161,594 161,594 -------------- ------------- --------------- -------------- Net income 448,664 (6,542) (97,891) 344,231 Accumulated deficit - beginning of year (6,616,639) (6,610,097) -------------- ------------- --------------- -------------- Accumulated deficit - end of year $ (6,167,975) $ (6,265,866) ============== ============= =============== ============== Earnings per common and common equivalent share: Net income $ .11 (d) .08 ============== ============= =============== ============== Weighted average shares of common stock outstanding 4,121,683 4,294,271 ============== ============= =============== ============== Page 19 of 21 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 Wateree Emergency Specialists , 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 9% for four months. (d.) Not applicable; Wateree Emergency Specialists, P.A. was not required to, and did not, compute earnings per share. Page 20 of 21 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: August 16, 1996 Page 21 of 21