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: November 24, 1998
ACADIA NATIONAL HEALTH SYSTEMS, INC.
(Exact Name of Registrant as Specified in its Charter)
COLORADO
(State or Other Jurisdiction of Incorporation)
0-28976 010509781
(Commission File Number) (I.R.S. Employer Identification Number)
95 Park Street, Lewiston, Maine 04240
(Address of Principal Executive Offices) (Zip Code)
(207) 777-3423
(800) 274-9185
(Registrant's Telephone Number, Including Area Code)
INFORMATION INCLUDED IN THIS REPORT
ITEM 1 CHANGES IN CONTROL OF REGISTRANT
Not Applicable
ITEM 2 ACQUISITION OR DISPOSITION OF ASSETS
(a) On September 8, 1998, the Registrant entered into a Contract for Sale of
Assets agreement with Northeast Medical Business Group, Inc., a New Hampshire
corporation (hereinafter referred to as "Northeast" or "Company") and Frank
and Martha DeJohn, sole shareholders of the Company, to acquire selected
assets and a limited list of liabilities of the Company. The Registrant
acquired all accounts receivables, furniture & equipment, computer hardware
and operating systems as well as all software licenses along with various
inventories an prepaid assets. In consideration, the Registrant paid a
combination of $300,000 in cash and selected bank, lease and trade debt
assumption, along with one hundred thousand (100,000) shares of the
Registrant's common stock valued at $1.12 per share. A portion of the cash
used in the acquisition was supplied by a five (5) year term loan for $200,000
at variable market rates obtained from Northeast Bank FSB, Auburn, Maine 04211
(no relationship with acquisition).
(b) All assets acquired were owned by or under lease to Northeast Medical
Business Group, Inc., and will continue to be used in the operations of
medical billing, accounts receivable management and medical practice
management.
ITEMS 3 THROUGH 4, 6 AND THROUGH 9 NOT APPLICABLE.
ITEM 5. OTHER EVENTS.
(i) Reference is made to the press release issued to the public by the
Registrant on September 9, 1998, the text of which is attached hereto as
Exhibit 99.1, for a description of the events reported pursuant to this
Form 8-K.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(a) Financial Statements.
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As of the date of the filing of this Current Report
on Form 8-K, the Registrant's Independent Auditor, Berry,
Dunn, McNeil & Parker, is completing its fiscal year end
audit (September 30, 1998) of the Registrant's financial
statements on a consolidated basis that will provide for
the financial statements required by this Item 7(a).
In accordance with Item 7(a)(4) of Form 8-K, such financial
statements will be filed within the Registrant's Form
10KSB for FY 98, no later than December 31, 1998.
(b) Pro Forma Financial Information.
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The folowing represents the pro forma financial statement
required by this Item 7(b).
ACADIA NATIONAL HEALTH SYSTEMS, INC.
PROFORMA COMBINED BALANCE SHEET
SEPTEMBER 30, 1998
(Unaudited)
ACADIA NORTHEAST
NATIONAL MEDICAL PROFORMA ADJUSTED
HEALTH BUSINESS ADJUSTMENTS BALANCE
SYSTEMS, INC. GROUP, INC.
(NOTE B) SEPT. 30, 1998
CURRENT ASSETS:
CASH-OPERATING $ 2,332 $ 1,915 $ (1,915) A $ 2,332
ACCOUNTS RECEIVABLE 855,657 288,312 (150,482) B 993,487
NOTES AND INTEREST RECEIVABLE 36,430 36,430
OTHER CURRENT ASSETS 56,667 56,667
TOTAL CURRENT ASSETS 951,086 290,227 (152,397) 1,088,916
PROPERTY & EQUIPMENT, NET 214,921 57,393 97,607 B 369,921
DUES FROM OFFICERS 192,404 (192,404) A
INTANGIBLE ASSETS, NET 34,253 920 66,868 B 102,041
OTHER ASSETS 52,400 7,968 232 B 60,600
$ 301,574 258,685 (27,697) 532,562
TOTAL ASSETS $ 1,252,660 548,912 (180,094) 1,621,478
CURRENT LIABILITIES:
ACCOUNTS PAYABLE $ 72,631 33,939 (99,012) B,C 7,558
NOTES PAYABLE, CURRENT PORTION 300,378 (242,778) A 57,600
LINE OF CREDIT 542,737 - 542,737
ACCRUED EXPENSE 56,279 21,008 32,450 E 109,737
TOTAL CURRENT LIAB. 671,647 355,325 (309,340) 717,632
LONG TERM LIABILITIES:
LONG TERM DEBT $ 126,849 56,980 6,880 B 190,709
OTHER NON-CUR. LIAB. 66,789 - 80,443 B 147,232
TOTAL LIABILITIES $ 865,285 412,305 (222,017) 1,055,573
STOCKHOLDERS' EQUITY:
COMMON STOCK 276,640 1,000 111,000 B 388,640
TREASURY STOCK (1,272) (1,272)
PAID IN CAPITAL 43,961 - - 43,961
RETAINED EARNINGS 68,046 135,607 (69,077) 134,576
TOTAL EQUITY $ 387,375 136,607 41,923 565,905
TOTAL LIABILITIES &
EQUITY $ 1,252,660 548,912 (180,094) 1,621,478
See Accompanying Notes to
Financial Statements
ACADIA NATIONAL HEALTH SYSTEMS, INC.
STATEMENT OF INCOME
FOR THE TWELVE MONTHS
ENDED SEPTEMBER 30, 1998
ACADIA NORTHEAST
NATIONAL MEDICAL PROFORMA ADJUSTED
HEALTH BUSINESS ADJUSTMENTS BALANCE
SYSTEMS, INC. GROUP, INC. SEPT. 30, 1998
1998 1998
REVENUES: $ 1,112,692 $ 519,126 1,631,818
DIRECT COSTS $ 388,273 224,250 612,523
GROSS PROFIT $ 724,419 $ 294,876 1,019,295
SELLING, GENERAL AND ADMIN EXP $ 610,317 148,479 758,796
DEPRECIATION AND AMORTIZATION EXP $ 43,720 - 47,417 D 91,137
INCOME BEFORE INCOME TAXES $ 70,382 146,397 (47,417) 169,362
PROVISION FOR INCOME TAXES $ 17,070 - 32,450 E 49,520
NET INCOME $ 53,312 146,397 (14,967) 119,842
NET INCOME (LOSS) PER SHARE 0.031654
WEIGHTED AVERAGE NUMBER OF
COMMON SHARES OUTSTANDING F 3,837,987
See Accompanying Notes to
Financial Statements
ACADIA NATIONAL HEALTH SYSTEMS, INC.
NOTES TO THE UNAUDITED PRO FORMA CONDENSED COMBINED
FINANCIAL STATEMENTS
SEPTEMBER 30, 1998
The accompanying unaudited pro forma condensed combined balance sheet as of
September 30, 1998 and unaudited pro forma condensed combined statements of
income for the year ended September 30, 1998 are presented to reflect the
acquisition of assets and business operations of Northeast Medical Business
Group, Inc. for a purchase price of $25,000 in cash and 100,000 shares of the
Company's common stock valued at $1.12 per share. The acquisitions were
effected pursuant to the terms of the Contract for Sale of Assets dated
September 8, 1998. The acquisitions were accounted for under the purchase
method of accounting. The accompanying unaudited pro forma condensed combined
financial statements reflects the effects of a preliminary allocation of the
purchase price.
Notes to Unaudited Pro forma Condensed Combined Financial Information
A. Adjustments to remove those certain assets and liabilities of Northeast
Medical Business Group that were not included in the acquisition under the
Contract for Sale of Assets dated September 8, 1998 (see Note B.)
B. To record the acquisition of Northeast Medical Billing, Acadia National
Health Systems acquired certain assets for total consideration of $137,000
and assumed certain liabilities not to exceed $275,000. Cash consideration
amounted to $25,000 with stock consideration of an additional $112,000. Net
assets acquired and liabilities assumed were as follows:
Accounts Receivable: $ 137,830
Equipment Deposits 8,200
Fixed assets and software 155,000
Liabilities assumed (248,765)
Fair Market Value of Net Assets Acquired 52,565
Goodwill of $84,735 has been recognized which represents the excess of the
purchase price of $137,000 over the fair market value of the net assets
acquired of $52,265.
Pro forma Condensed Combined Income Statement Adjustments
C. Northeast Medical Billing income for the year ended September 30, 1998 has
been combined with Acadia National Health Systems, Inc.
D. Amortization of goodwill over 5 year life. Fixed assets and software are
depreciated over lives ranging from 5 to 10 years.
E. Provisions for income taxes at an estimated income tax rate of 28%.
F. Weighted average shares increased by 100, 000 shares as if these shares were
issued on October 1, 1997 and were outstanding for the entire year.
(c) Exhibits
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See Index to Exhibits
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.
ACADIA NATIONAL HEALTH SYSTEMS, INC.
Mark T. Thatcher
DATE: November 23, 1998 By: /s/ Mark T. Thatcher
Name: Mark T. Thatcher
Title: Filing Agent
INDEX TO EXHIBITS
Exhibit Description:
2.1--Contract for Sale of Assets of Northeast Medical Business Group to
Acadia National Health Systems, Inc., dated September 8, 1998;
2.2--Non-Competition, Confidentiality and Non-Solicitation Agreement
between Frank and Martha DeJohn and Acadia National Health Systems, Inc.,
dated September 8, 1998;
5.1--Opinion on Legality of Securities Being Issued to Frank and Martha
DeJohn;
10.1--Board of Directors' Resolution Authorizing Increase of Outstanding
Shares in connection with the issuance of 100,000 shares of common
stock of Acadia National Health Systems, Inc., to Frank and Martha
DeJohn, in joint tenancy w/ right of survivorship;
10.2--Opinion of Counsel with respect to issuance of 100,000 shares of
common stock of Acadia National Health Systems, Inc. to Frank and
Martha DeJohn;
20.1--Board of Director's Resolutions authorizing a term loan in connection
with purchase of selected assets of Northeast Medical Business Group,
Inc. by Acadia National Health Systems, Inc;
20.2--Opinion of Borrower's Counsel;
99.1--Text of press release dated September 9, 1998.