UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K/A
Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934.
DYNAMIC ASSOCIATES, INC.
(Exact name of registrant as specified in its charter)
NEVADA 33-55254-03 87-0473323
(State or other jurisdiction of (Commission File Number) (IRS Employer
incorporation) Identification No.)
7373 North Scottsdale Road, Suite B-150
Scottsdale, Arizona 85253
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (602) 483-8700
AMENDMENT NO. 4
The undersigned registrant hereby amends the following items, financial
statements, exhibits or other portions of its CURRENT REPORT on Form 8-K dated
August 27, 1996 as set forth in the pages attached hereto:
Audited financial statements as of November 30, 1996 and December 31, 1996,
1995, and 1994 for Genesis Health Management Corporation
Signature
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.
Dynamic Associates, Inc.
Date: February 19, 1997 /s/ Logan B. Anderson
Logan B. Anderson, Secretary/Treasurer
GENESIS HEALTH MANAGEMENT CORPORATION
FINANCIAL STATEMENTS
FOR THE ELEVEN MONTHS ENDED NOVEMBER 30, 1996
ONE MONTH ENDED DECEMBER 31, 1996
YEAR ENDED DECEMBER 31, 1995
PERIOD FROM JULY 27, 1994 (DATE OF INCEPTION) TO DECEMBER 31, 1994
To the Board of Directors and Stockholders
of Genesis Health Management Corporation
I have audited the accompanying balance sheets of Genesis Health Management
Corporation (a Louisiana corporation) as of November 30, 1996, December 31,
1996, 1995 and 1994, and the related statements of operations and retained
earnings, and cash flows for the eleven months ended November 30, 1996, one
month ended December 31, 1996, and the year ended December 31, 1995, and period
from July 27, 1994 (date of inception) to December 31, 1994. These financial
statements are the responsibility of the Company's management. My responsibility
is to express an opinion on these financial statements based on my audit.
I conducted my audit in accordance with generally accepted auditing standards.
Those standards require that I 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.
I believe that my audit provides a reasonable basis for my opinion.
In my opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of Genesis Health Management
Corporation as of November 30, 1996, December 31, 1996, 1995 and 1994, and the
results of its operations and its cash flows for the eleven months ended
November 30, 1996, one month ended December 31, 1996, year ended December 31,
1995 and period from July 27, 1994 (date of inception) to December 31, 1994 in
conformity with generally accepted accounting principles.
Dewey L. Simonton
Certified Public Accountant
February 4, 1997
GENESIS HEALTH MANAGEMENT CORPORATION
BALANCE SHEETS
NOVEMBER 30, 1996 AND DECEMBER 31, 1996, 1995 AND 1994
ASSETS
November 30, December 31, December 31, December 31,
1996 1996 1995 1994
CURRENT ASSETS
Cash $ 166,416 $ 556,817 $ 178,945 $ 67,425
Accounts Receivable 1,294,000 1,501,000 589,500 0
Prepaid assets 39,320 98,802 16,639 5,752
Other receivables 122,887 17,254 7,495 0
Deferred taxes 0 0 0 12,764
--------- --------- --------- ---------
Total Current Assets 1,622,623 2,173,873 792,579 85,941
--------- --------- --------- ---------
Property and Equipment
Leasehold improvements 16,493 16,493 15,724 7,520
Transportation equipment 95,135 95,135 212,062 95,730
Furniture and fixtures 87,976 87,976 56,821 13,615
--------- --------- --------- ---------
199,604 199,604 284,607 116,865
Less accumulated depreciation (42,243) (46,010) (36,786) (7,845)
--------- --------- --------- ---------
Total Property and Equipment 157,361 153,594 247,821 109,020
--------- --------- --------- ---------
Other Assets
Security deposits 410 410 200 0
--------- --------- --------- ---------
Total Other assets 410 410 200 0
--------- --------- --------- ---------
Total Assets $ 1,780,394 $ 2,327,877 $ 1,040,600 $ 194,961
========= ========= ========= =========
3
GENESIS HEALTH MANAGEMENT CORPORATION
BALANCE SHEETS (cont'd)
NOVEMBER 30, 1996 AND DECEMBER 31, 1996, 1995 AND 1994
LIABILITIES AND EQUITY
November 30, December 31, December 31, December 31,
1996 1996 1995 1994
CURRENT LIABILITIES
Accounts payable-trade $ 190,738 $ 264,683 $ 159,670 $ 13,080
Notes payable 150,000 150,000 400,005 0
Current portion-long term debt 25,439 25,770 63,716 4,046
Accrued expenses 250,549 269,121 74,442 2,003
Accrued income tax 0 31,445 46,544 0
Withheld & accrued payroll tax 15,918 34,439 75,354 16,954
--------- --------- --------- ---------
Total Current Liabilities 632,644 775,458 819,731 36,083
--------- --------- --------- ---------
Long Term Liabilities
Notes payable 37,525 33,830 78,854 39,324
Loans from shareholders 0 0 26,095 168,743
Deferred income taxes 0 149,535 0 0
--------- --------- --------- ---------
Total Long Term Liabilities 37,525 183,365 104,949 208,067
--------- --------- --------- ---------
Total Liabilities 670,169 958,823 924,680 244,150
--------- --------- --------- ---------
Stockholders Equity
Common stock (no par 1,000,000 shares
authorized 1,000,000 issued) (10,000
shares authorized and issued at
11/30/96 and 1995 and 1994) 1,000 1,000 1,000 1,000
Retained earnings 114,920 1,109,225 (50,189) 0
Distributions (1,450,000) 0 0 0
Net income 2,444,305 258,829 165,109 (50,189)
--------- --------- --------- ---------
Total Stockholders Equity 1,110,225 1,369,054 115,920 (49,189)
--------- --------- --------- ---------
Total Liabilities & Equity $ 1,780,394 $ 2,327,877 $ 1,040,600 $ 194,961
========= ========= ========= =========
4
GENESIS HEALTH MANAGEMENT CORPORATION
STATEMENTS OF OPERATIONS AND RETAINED EARNINGS
ELEVEN MONTHS ENDED NOVEMBER 30, 1996, AND ONE MONTH ENDED DECEMBER 31, 1996
YEAR ENDED DECEMBER 31, 1995 AND PERIOD FROM JULY 27, 1994 (DATE OF INCEPTION)
TO DECEMBER 31, 1994
November 30, December 31, December 31, December 31,
1996 1996 1995 1994
Revenue
Fees $ 8,555,860 $ 1,122,500 $ 3,832,188 $ 65,000
--------- --------- --------- ---------
Total Revenue 8,555,860 1,122,500 3,832,188 65,000
Operating Expenses
Bad debts 692,500 0 47,425 0
Repairs and maintenance 36,105 392 4,148 0
Amortization 782 71 0 0
Rents 91,421 11,511 4,895 5,943
Utilities 93,122 9,681 46,314 4,928
Wages and salaries 3,021,207 345,434 2,430,081 51,638
Consultation expense 1,136,378 178,306 446,850 0
Travel and entertainment 362,606 44,164 107,941 9,411
Depreciation expense 46,876 3,767 34,816 7,845
Insurance 152,557 29,057 32,865 1,431
Advertising 24,410 2,004 22,638 2,529
Legal and accounting 46,479 6,146 158,137 0
Payroll taxes 235,958 35,726 123,455 5,311
Dues and subscriptions 9,985 1,571 4,619 660
Auto and truck expense 20,294 2,343 11,893 1,040
Contributions 8,575 600 944 500
Other operating expenses 117,165 11,240 113,697 36,445
--------- --------- --------- ---------
Total Operating Expenses 6,096,420 682,013 3,590,718 127,681
--------- --------- --------- ---------
Other (Income) & Expense
Interest expense 15,561 678 17,077 272
Interest income (426) 0 (24) 0
--------- --------- --------- ---------
Total Other (Income) Expense 15,135 678 17,053 272
--------- --------- --------- ---------
5
GENESIS HEALTH MANAGEMENT CORPORATION
STATEMENTS OF OPERATIONS AND RETAINED EARNINGS (cont'd)
ELEVEN MONTHS ENDED NOVEMBER 30, 1996, AND ONE MONTH ENDED DECEMBER 31, 1996
YEAR ENDED DECEMBER 31, 1995 AND PERIOD FROM JULY 27, 1994 (DATE OF INCEPTION)
TO DECEMBER 31, 1994
November 30, December 31, December 31, December 31
1996 1996 1995 1994
Income (loss) before
provisions for taxes 2,444,305 439,809 224,417 (62,953)
Provision For Taxes
Provision for federal
income tax (benefit) 0 149,535 38,604 (10,738)
Provision for state
income tax (benefit) 0 31,445 20,704 (2,026)
--------- --------- --------- ---------
Total Provision (benefit)
for Taxes 0 180,980 59,308 (12,764)
--------- --------- --------- ---------
Net Income (Loss) 2,444,305 258,829 165,109 (50,189)
Retained earnings -
Beginning of period 114,920 1,109,225 (50,189) 0
Less Distributions (1,450,000) 0 0 0
--------- --------- --------- ---------
Retained earnings -
End of period $ 1,109,225 $ 1,368,054 $ 114,920 $ (50,189)
========= ========= ========= ========
Net income (loss)
per weighted
average share $ 244.43 $ .26 $ 16.51 $ (5.02)
========= ========= ========= ========
Weighted average
number of common
shares used to compute
net income (loss) per
weighted average share 10,000 1,000,000 10,000 10,000
======== ========= ========= ========
6
GENESIS HEALTH MANAGEMENT CORPORATION
STATEMENTS OF CASH FLOWS
ELEVEN MONTHS ENDED NOVEMBER 30, 1996, AND ONE MONTH ENDED DECEMBER 31, 1996
YEAR ENDED DECEMBER 31, 1995 AND PERIOD FROM JULY 27, 1994 (DATE OF INCEPTION)
TO DECEMBER 31, 1994
November 30, December 31, December 31, December 31,
1996 1996 1995 1994
Cash Flows from Operating
Activities
Net income (loss) $ 2,444,305 $ 258,829 $ 165,109 $ (50,189)
Adjustments to reconcile net income
(loss) to net cash provided (used)
by operating activities:
Depreciation expense 46,876 3,767 34,816 7,845
Loss (gain) on disposal
equipment 14,253 0 0 0
Change in accts receivable (704,500) (207,000) (589,500) 0
Change in prepaid expenses (22,682) (59,482) (10,887) (5,751)
Change in other receivables (115,392) 105,633 (7,494) 0
Change in deferred taxes 0 149,535 12,764 (12,764)
Change in other assets (210) 0 (200) 0
Change in accts payable 31,068 73,945 146,590 13,080
Change in accrued expenses 176,107 18,572 72,439 2,003
Change in accrued income tax (46,544) 31,445 46,544 0
Change in payroll taxes (59,436) 18,522 58,400 16,954
--------- --------- --------- ---------
Total Adjustments (680,460) 134,937 (236,528) 21,367
--------- --------- --------- ---------
Net Cash Provided (Used) by
Operating Activities 1,763,845 393,766 (71,419) (28,822)
--------- --------- --------- ---------
Cash Flows From Investing
Activities
Investment in equipment (122,098) 0 (173,618) (116,865)
Sale of equipment 151,429 0 0 0
--------- --------- --------- ---------
Net Cash Provided (Used) by
Investing Activities 29,331 0 (173,618) (116,865)
--------- --------- --------- ---------
7
GENESIS HEALTH MANAGEMENT CORPORATION
STATEMENTS OF CASH FLOWS (cont'd)
ELEVEN MONTHS ENDED NOVEMBER 30, 1996, AND ONE MONTH ENDED DECEMBER 31, 1996
YEAR ENDED DECEMBER 31, 1995 AND PERIOD FROM JULY 27, 1994 (DATE OF INCEPTION)
TO DECEMBER 31, 1994
November 30, December 31, December 31, December 31,
1996 1996 1995 1994
Cash Flows From Financing
Activities
New borrowings $ 0 $ 0 $ 356,557 $ 212,112
Debt reductions (355,706) (3,365) 0 0
Proceeds from issuing stock 0 0 0 1,000
Distributions paid (1,450,000) 0 0 0
--------- --------- --------- ---------
Net Cash Provided (Used)
by Financing Activities (1,805,706) (3,365) 356,557 213,112
--------- --------- --------- ---------
Net Increase (Decrease)
in Cash (12,530) 390,401 111,520 67,425
Cash at Beginning of Period 178,946 166,416 67,425 0
--------- --------- --------- ---------
Cash at End of Year $ 166,416 $ 556,817 $ 178,945 $ 67,425
========= ========= ========= =========
SUPPLEMENTAL DISCLOSURES
Interest paid 15,561 678 17,077 2,275
Income taxes paid 0 0 47,828 0
8
Genesis Health Management Corporation
Notes to Financial Statement
For the period ended December 31, 1996
Nature of Business
Genesis Health Management Corporation, a Louisiana corporation,incorporated on
July 27, 1994, manages the operation of geropsychiatric units for various
hospitals located in the states of Louisiana, Arkansas, Mississippi and
Tennessee. Genesis Health Management Corporation contracts for three to five
years. On December 2, 1996, the Company merged with Genesis Acquisition
Corporation. The surviving entity changed its name to Genesis Health Management
Corporation on December 5, 1996.
NOTE A - Summary of Significant Accounting Policies
This summary of significant accounting policies of Genesis Health Management
Corporation is presented to assist in understanding the Company's financial
statements. The financial statements and notes are representations of the
Company's management who is responsible for their integrity and objectivity.
These accounting policies conform to generally accepted accounting principles
and have been consistently applied in the preparation of the financial
statements.
Property and Equipment
Property and equipment are carried at cost. Depreciation of property and
equipment is provided using the straight-line method for financial reporting.
Estimated useful lives are as follows:
Years
Vehicle 5
Lease Improvements 7
Furniture and Fixtures 7
For federal tax purposes, depreciation is computed using the modified
accelerated cost recovery system.
Income Taxes
The Company had elected to be treated as a sub-s for tax purposes for the year
beginning, January 1, 1996, to November 30, 1996. The Company's common stock was
sold effective December 1, 1996, and the sub-s election was terminated at that
time. The Company's income from December 1, to December 31, 1996, will be taxed
at the corporate level.
NOTE B - Cash Concentration
The Company maintains cash balances in excess of the banks federally insured
limits. The Company tries to keep this partial risk at a minimum.
9
Genesis Health Management Corporation
Notes to Financial Statements
For the period ended December 31, 1996
NOTE C - Allowance for Doubtful Accounts
Accounts receivable are presented at net of allowance for doubtful accounts in
the amount of $ 739,925 for December 31, 1996, $ 739,925 for the period ended
November 30, 1996 and $ 47,425 for the year ended December 31, 1995.
NOTE D - Property and Equipment
Accumulated
Cost Depreciation
Vehicles $ 95,135 $ 25,166
Lease Improvements 16,493 4,498
Furniture and Fixtures 87,976 16,346
-------- --------
$ 199,604 $ 46,010
======== ========
NOTE E - Long Term Debt
The Company finances certain equipment for various terms. The following is a
summary of long-term debt at December 31, 1996:
9.25% Note payable to bank in monthly
installments of $ 660.88, plus interest
through February 21, 2000. $ 21,514
9.40% Note payable to a lending institution
payable in monthly installments of $ 927.22,
plus interest through November 29, 1999. 28,288
11.50% Note payable to a lending institution
payable in monthly installments of $ 1,032.13,
plus interest through November 6, 1997. 9,798
--------
Less: Current maturities included in
current liabilities (25,770)
--------
$ 33,830
========
10
Genesis Health Management Corporation
Notes to Financial Statements
For the period ended December 31, 1996
Following are maturities of long-term debt.
1998 $ 16,510
1999 17,077
2000 243
--------
$ 33,830
========
NOTE F - Use of Estimates
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.
NOTE G - Related Party Transactions
Gulf States Air, Inc. is an airplane charter service which has the same
ownership as Genesis Health Management Corporation. Genesis Health Management
Corporation has paid Gulf States Air, Inc. $156,761 for charter services for the
eleven months ended November 30, 1996 and $ 26,250 for the one month ended
December 31, 1996.
NOTE H - Leases
The Company is the lessee of equipment under operating leases expiring in
various years through 1998.
Minimum future rental payments under non-cancelable operating leases having
remaining terms in excess of one year as of December 31, 1996,for each of the
following years:
Years Ended Amount
1997 $ 126,475
1998 68,035
--------
Total minimum future rental payments $ 194,510
========
The Company leases an aircraft from Gulf States Air, Inc. on a monthly basis,
but the lease payment is not determined until the end of each month. Future
payments are not determinable. The rental expenses of operating leases incurred
through November 30, 1996, is $ 57,975 and for the one month ended December 31,
1996, is $ 8,211.
11
Genesis Health Management Corporation
Notes to Financial Statements
For the period ended December 31, 1996
NOTE I - Advertising
The Company incurs no direct-response advertising. The advertising expense for
the period ended November 30, 1996, is $ 24,410 and for the one month ended
December 31, 1996, is $ 2,004.
NOTE J - Compensated Absences
The Company accrues compensated absences. The cost for the period ended November
30, 1996, is $ 83,410 and for the one month ended December 31, 1996, is $ 4,530.
12