Exhibit 99.1 (b)
ORANGE COUNTY PROFESSIONAL SERVICES, INC.
(DBA CALIFORNIA PROFESSIONAL SERVICES)
AND AFFILIATED COMPANIES
Combined Consolidated Balance Sheets
June 30, 2000 and December 31, 1999
Assets
------
Unaudited
June 30, December 31,
2000 1999
---------- -----------
Cash $ 8,361 $ -
Restricted cash - 147,147
Accounts receivable, net 1,048,192 1,137,475
Property and equipment, net 157,017 128,271
Notes receivable from owners - 73,756
Prepaid expenses and other assets 221,834 151,064
Goodwill, net 331,593 344,508
---------- ----------
$1,766,997 $1,982,221
========== ==========
Liabilities and Owners' Equity
------------------------------
Cash overdraft $ - $ 247,225
Accounts payable 215,995 232,948
Trust payables - 147,147
Accrued liabilities 244,247 242,531
Lines of credit 299,391 334,451
Notes payable 523,878 610,991
Notes payable to owners 282,164 156,333
Interest payable to owners 55,483 47,092
---------- ----------
Total liabilities 1,621,158 2,018,718
---------- ----------
Owners' Equity:
Common stock, no par value, 226,000 shares authorized,
17,640 shares issued and outstanding 30,000 30,000
Retained deficit (320,916) (608,053)
Partners' capital 436,755 541,556
---------- ----------
Total owners' equity 145,839 (36,497)
---------- ----------
$1,766,997 $1,982,221
========== ==========
The accompanying notes are an integral part of these combined consolidated
balance statements.
ORANGE COUNTY PROFESSIONAL SERVICES, INC.
(DBA CALIFORNIA PROFESSIONAL SERVICES)
AND AFFILIATED COMPANIES
Combined Consolidated Statements of Operations
For the Six Months Ended June 30, 2000 and 1999
Unaudited Unaudited
June 30, June 30,
2000 1999
---------- ----------
Net Revenues $4,838,338 $4,875,913
Operating Expenses:
Salaries, wages and related benefits 3,530,755 3,002,178
Selling, general and administrative 1,007,866 1,030,996
Depreciation and amortization 28,662 31,134
---------- ----------
4,567,283 4,064,308
---------- ----------
Income (loss) from operations 271,055 811,605
---------- ----------
Other Income (Expense):
Interest income 345 7,328
Interest expense (37,684) (2,356)
---------- ----------
(37,339) 4,972
---------- ----------
Income (loss) before provision for income taxes 233,716 816,577
Provision for Income Taxes 11,381 33,567
---------- ----------
Net income (loss) $ 222,335 $ 783,010
========== ==========
The accompanying notes are an integral part of these combined consolidated
financial statements.
ORANGE COUNTY PROFESSIONAL SERVICES, INC.
(DBA CALIFORNIA PROFESSIONAL SERVICES)
AND AFFILIATED COMPANIES
Combined Consolidated Statements of Cash Flows
For the Six Months Ended June 30, 2000 and 1999
Unaudited Unaudited
June 30, June 30,
2000 1999
--------- ---------
Cash Flows from Operating Activities:
Net income (loss) $ 222,335 $ 783,010
Adjustments to reconcile net income (loss) to net
cash provided by operating activities:
Depreciation and amortization 28,662 31,134
(Increase) decrease in assets:
Restricted cash 147,147 (147,147)
Accounts receivable 89,283 (97,221)
Prepaid expenses and other assets (70,770) 12,611
Increase (decrease) in liabilities:
Accounts payable (16,954) (85,947)
Trust payables (147,147) 147,147
Accrued liabilities 10,108 (52,341)
--------- ---------
Net cash provided by (used in)
operating activities 262,664 591,246
--------- ---------
Cash Flows from Investing Activities:
Purchases of property and equipment (44,492) (87,194)
--------- ---------
Net cash used in investing activities (44,492) (87,194)
--------- ---------
Cash Flows from Financing Activities:
Net borrowings (repayments) on overdraft facility (247,225) (26,045)
Net borrowings (repayments) on line of credit (35,060) (5,729)
Net borrowings (repayments) on notes payable (87,113) (13,563)
Net borrowings (repayments) on owners notes 199,587 (11,453)
Stock repurchased - (375,000)
Distributions to partners (40,000) (10,000)
--------- ---------
Net cash provided by (used in)
financing activities (209,811) (441,790)
--------- ---------
Net Increase (Decrease) in Cash 8,361 62,262
Cash, beginning of the period - -
--------- ---------
Cash, end of the period $ 8,361 $ 62,262
========= =========
Unaudited Unaudited
June 30, June 30,
2000 1999
--------- ---------
Supplemental Disclosure of Cash Flow Information:
Cash paid during the period for interest $ 29,293 $ 2,356
========= =========
Cash paid during the period for income taxes $ 32,365 $ 10,983
========= =========
The accompanying notes are an integral part of these combined consolidated
financial statements.
- -2-
ORANGE COUNTY PROFESSIONAL SERVICES, INC.
(DBA CALIFORNIA PROFESSIONAL SERVICES)
AND AFFILIATED COMPANIES
Notes to Financial Statements
June 30, 2000
1. Organization and Description of Business
----------------------------------------
Orange County Professional Services, Inc. (dba California Professional Services)
and Affiliated Companies (the "Company") consists of Orange County Professional
Services, Inc., a California corporation ("OCPS"), Impact Seminars and
Consulting, Inc., a Hawaii corporation and wholly-owned subsidiary of OCPS
("Impact"), RBA Rem-Care, Inc., a California corporation ("RBA"), Insource
Medical Solutions, LLC, a California limited liability company ("Insource"), and
Hospital Employee Labor Pool, a California corporation ("HELP").
The Company provides collection services, billing services, outsourcing and
temporary staffing services, and specialty consulting services primarily to the
healthcare industry. The collection services include the recovery of pre-
delinquent and delinquent healthcare receivables including early out programs.
The billing services include virtually all billing functions for healthcare
providers, including electronic bill submission capabilities. The outsourcing
and temporary staffing services include providing temporary staffing needs for
any business office function of healthcare providers. Available staff includes,
among other things, coders, billers, abstractors and collectors. The specialty
consulting services include insurance claims management, clinical denial audits,
zero balance reviews, and eligibility reviews.
2. Basis of Presentation
---------------------
In the opinion of management, the financial information reflects all adjustments
which are necessary to a fair presentation of the financial position, results of
operations and cash flows for the interim periods presented and are of a normal
recurring nature, unless otherwise disclosed in this report.
The accompanying unaudited, combined consolidated financial statements have been
prepared in accordance with Securities and Exchange Commission requirements
for interim financial statements. Therefore, they do not include all disclosures
that would be presented in an Annual Report on Form 10-KSB. The statements
should be read in conjunction with the notes to the audited financial statements
of the Company as of and for the five months ended May 31, 2000 and the years
ended December 31, 1999 and 1998.
3. Acquisition by RevCare, Inc.
----------------------------
On August 14, 2000, the Company completed the sale of (i) all of the outstanding
stock of OCPS and its subsidiary, Impact, and (ii) substantially all of the
assets of Insource, RBA and HELP, to RevCare, Inc. The sales price for these
transactions, subject to certain post-closing adjustments, was approximately
$10,500,000, of which $4,200,000 shall be paid in the form of convertible
promissory notes.