U. S. Securities and Exchange Commission
Washington, D. C. 20549
FORM 10-KSB-A1
[X] ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the fiscal year ended March 31, 2004
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from _____________ to ____________
Commission File No. 000-26177
OMNI MEDICAL HOLDINGS, INC.
(Name of Small Business Issuer in its Charter)
UTAH 87-0425275
(State or Other Jurisdiction of (I.R.S. Employer I.D. No.)
incorporation or organization)
1107 Mt. Rushmore Road, Suite 2
Rapid City, South Dakota 57701
-------------------------------
(Address of Principal Executive Offices)
Issuer's Telephone Number: (605) 718-0380
N/A
(Former Name or Former Address, if changed since last Report)
Securities Registered under Section 12(b) of the Exchange Act: None
Name of Each Exchange on Which Registered: None
Securities Registered under Section 12(g) of the Exchange Act:
$.001 par value common stock
Check whether the Registrant (1) filed all reports required to be filed
by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for
such shorter period that the Registrant was required to file such reports),
and (2) has been subject to such filing requirements for the past 90 days.
(1) Yes X No (2) Yes X No
--- --- --- ---
Check if there is no disclosure of delinquent filers in response to Item
405 of Regulation S-B is not contained in this Form, and no disclosure will be
contained, to the best of the Registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form
10-KSB or any amendment to this Form 10-KSB. [ ]
State Registrant's revenues for its most recent fiscal year: March 31,
2004 - $1,181,146.
State the aggregate market value of the voting stock held by
non-affiliates computed by reference to the price at which the stock
was sold, or the average bid and asked prices of such stock, as of a specified
date within the past 60 days.
July 9, 2004 - $1,600,240.20. There are approximately 6,154,770 shares
of common voting stock of the Registrant beneficially owned by non-affiliates.
These computations are based upon the bid price for the common stock of the
Registrant on the OTC Bulletin Board of the National Association of Securities
Dealers, Inc. ("NASD") on July 9, 2004, or $0.26 per share.
(ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS
DURING THE PAST FIVE YEARS)
Not Applicable.
Check whether the issuer has filed all documents and reports required to
be filed by Section 12, 13 or 15(d) of the Exchange Act after the distribution
of securities under a plan confirmed by a court. Yes No
--- ---
(APPLICABLE ONLY TO CORPORATE ISSUERS)
State the number of shares outstanding of each of the Registrant's
classes of common equity, as of the latest practicable date:
July 9, 2004
23,898,776
DOCUMENTS INCORPORATED BY REFERENCE
A description of "Documents Incorporated by Reference" is contained
in Part III, Item I.
Transitional Small Business Issuer Format Yes X No
--- ---
PART I
Item 1. Description of Business.
------------------------
Business Development.
---------------------
The past year has been one of great change for the Company. Effective May
2003, the Company entered into an Agreement with one of its officers and
shareholders whereby the Company agreed to exchange 100% of the common stock
of its wholly-owned subsidiary, Mastel Precision Surgical Insturments ("MPSI")
and $36,000 cash for all shares of common stock of the Company owned
individually or jointly by the officer and his wife, a total of 7,795,520
shares. As of April 30, 2003, the assets of MPSI had a carrying value of
$442,000, and MPSI's obligations and liabilities had a carrying value of
$527,000. Due to the related party nature of the transaction, no gain was
recognized and shareholders' equity was increased by $49,000. The results of
operations from MPSI have been retroactively restated as discontinued
operations.
Effective May 30, 2003, the Company completed an Asset Purchase Agreement
with Medical Billings Management Inc. ("MBM"), a corporation based in
Mississippi The aggregate purchase price was $403,979, including $150,000
paid at closing, a working capital loan of $75,000 payable on November 30,
2003 (paid in February 2004), and $215,279 payable on May 31, 2004 (subject to
an adjustment based on actual revenues through May 2004). See Part III, Item
13, for reference to the Company's 8-K Current Report respecting this
acquisition.
In early June, 2003, the Company retained the services of Windstone
Capital, an investment banking firm in Phoenix, Arizona, to raise capital for
additional acquisitions. A private placement offering began in early November,
and management believes that the firm will be successful in raising $800,000,
the maximum amount of the proposed offering.
In early July, 2003, Mastel Precision, Inc. changed its name to Omni
Medical Holdings, Inc., a Nevada corporation. On September 3, 2003, the name
was again changed, this time to Omni Medical of Nevada. This was done in order
to facilitate the impending merger with Piezo Instruments, Inc., the
Registrant.
Effective September 5, 2003, Piezo Instruments Inc. ("Piezo") (OTCBB:
PEZO) announced the closing of the acquisition of a majority of the
outstanding securities of Omni Medical Holdings Inc., and then changed its
name to "Omni Medical of Nevada Inc." ("Omni"). Terms of the Agreement and
Plan of Reorganization (the "Reorganization Agreement") provided for Piezo to
issue up to 16,000,000 post-split shares of its common stock to the
shareholders of Omni for all of the outstanding common stock of Omni.
At the closing, and excluding the shares exchanged for Omni, the
outstanding common stock of Piezo amounted to 2,000,000 shares, after taking
into account a 1 for 14.5 reverse split and the following transactions: (1)In
consideration of the closing of the Reorganization Agreement, certain
principal stockholders of Piezo (i) delivered 1,466,379 post-split shares of
Piezo for cancellation, which included 225,000 post-split shares of common
stock underlying an option granted to one of the canceling stockholders; and
(ii) waived any registration rights that had been granted to them or were
applicable to any of the cancelled shares. In exchange for the cancellation of
these shares and the waiver of any registration rights, Piezo issued an
aggregate of 500,000 post-split newly issued shares of common stock to the
canceling stockholders. (2) Piezo issued 293,104 shares of common stock to
certain principal stockholders of Piezo in exchange for services to be
rendered under a six month consulting agreement, resulting in consulting
expense of approximately $8,800, of which approximately $2,900 is deferred at
December 31, 2003.
As of October 31, 2003, the deadline for completing the share exchange
transaction with Piezo, 81% of Omni's outstanding shares had been tendered to
the Company in accordance with the instructions for exchanging shares
(12,443,062 shares were issued through March 31, 2004 and an additional
474,659 shares are to be issued as of March 31, 2004). The other 19% of Omni's
outstanding shares had taken no action whatsoever and continue to own a
minority interest in the Company's subsidiary. Shareholders of approximately
9,222 shares exercised their rights to dissent, and the Company repurchased
the shares for an aggregate of $120.
Omni Medical also announced the addition of Lance Weaver to the Board of
Directors effective October 1, 2003. Mr. Weaver is a stockholder in the
Company.
Effective December 1, 2003, Omni completed an Asset Purchase Agreement
with McCoy Business Services, Inc. ("McCoy"), a corporation based in Kentucky
and a provider of medical transcription services. The aggregate purchase price
was $391,989 including $156,300 payable at closing, and $235,689 payable in
eight equal quarterly installments beginning on February 29, 2004. The
quarterly payments are subject to an earn-out provision to be calculated based
on a multiple of the amount by which revenues for each quarter are greater or
less than a baseline amount. See Part III, Item 13, for reference to the
Company's 8-K Current Report respecting this acquisition.
On May 10, 2004, our Board of Directors resolved to dismiss Gelfand,
Hochstadt Pangburn, P.C., as our principal independent accountant and to
retain Mantyla McReynolds, Certified Public Accountants, of Salt Lake City,
Utah, as our new principal independent accountant, and to audit our financial
statements for the fiscal year ended March 31, 2004. See Part III, Item 13,
for reference to the Company's 8-K Current Report respecting this action.
Business.
---------
Omni Medical Holdings is in the business of providing medical services to
doctors, clinics and hospitals. Currently, we provide medical transcription,
billing and collection services. We are actively acquiring companies in these
industries as well as other medical services related areas.
Principal Products or Services and their Markets.
-------------------------------------------------
Omni provides medical transcription service to hospitals and healthcare
facilities currently in seven states. Whenever a health care provider makes a
diagnosis or provides a patient treatment, those actions must be documented.
Government and insurance regulations are such that these important medical
records, which affect patient health, must be in readable form. This results
in the health care provider dictating the patient treatment in some form and
someone else typing that dictation. Due to the obvious importance of this
task, a transcriptionist must have a level of training well beyond a normal
typist. This would include detailed knowledge of medical terminology and
working knowledge of heath and science principles in a variety of medical
disciplines. Transcription has become an important and essential service in
all healthcare practices. Clients are usually charged a line rate of $0.11 -
$0.18, depending on the work involved. Transcriptionists are usually hired on
a subcontract basis, work out their home and are compensated on a per line
basis. Quality assurance and other management personnel are full-time
employees, provide services at the corporate office and are compensated on a
salary basis.
Omni also provides medical billing and collections services in the State
of Mississippi. Medical billing and collections are the lifeblood of any
healthcare facility. Accurate and timely collections insure an efficient
practice and high standard of care.
Omni is currently operating in seven states. The market, however, can
encompass the entire country made possible through the electronic transfer of
data. It is the intention of Omni Medical to focus its marketing efforts on
mid-size metropolitan cities throughout the United States. Its expansion and
acquisition strategies will position Omni to become a nationwide provider of
medical services.
Distribution Methods of the Products or Services.
-------------------------------------------------
The finished product (e.g., transcribed lines) is distributed digitally
through electronic transmission to the client. Medical billings are either
mailed or sent electronically first to the insurance companies. The patient
is then billed for any difference that was not received from their insurance
company. Insurance company and patient payments are remitted to a banking
institution lockbox designated under the doctor's name or healthcare facility.
Collections activities involve following up with either the insurance
companies or patient for any payment not yet received within a designated
amount of time.
Status of any Publicly Announced New Product or Service.
--------------------------------------------------------
None; not applicable.
Competitive Business Conditions.
--------------------------------
Healthcare services (e.g., transcription, billing, collections) is a
highly fragmented industry. Two of our largest competitors are Medquist, Inc.
("MEDQ") and IDX Systems Corporation ("IDXC"), both of which are large and
well funded publicly traded companies, with substantially more assets and
resources that Omni. The primary competition comes from the healthcare
facility itself. Due to the overhead expense of providing these services
internally, more healthcare facilities will be looking to outsource these
duties to reduce costs.
Transcription has become an important and essential service in all
healthcare practices. According to the "MTIA," (a transcription trade
association), medical transcription is a fragmented $15 billion industry, with
revenues projected to approach $25 billion over the next five years.
Medical billing and collections are the lifeblood of any healthcare
facility. Accurate and timely collections ensure an efficient practice and
high standard of care. Although no industry figures are available, it is
known that approximately $1.5 trillion was spent on health care in the United
States last year. Assuming that half of that amount occurred at the point of
care, that would be a potential billing market of $750 billion. Health care
providers that use billing services generally pay between 6-10% of the amount
collected on their behalf. This would put the potential estimated revenue for
billing services somewhere between $45-75 billion, and growing at a rate of 8%
annually. With the rising cost of health care and an aging population, in
five years the market could well be generating over $100 billion in annual
revenue. Within the billing industry, there are generally no subcontractors,
and all work from the corporate office.
According to United State Government studies, the medical industry is
growing at a rate of 8% annually, with estimates as high as 12% in the coming
years. The need for medical services by healthcare providers will continue to
mirror that growth rate. It is widely known that an increasingly aging
population, along with a country that will spare no expense for personal
consumption of medical care, will contribute to this growth. Healthcare
providers will also remain under pressure to reduce operating expense and
expand margins. The effect is that services currently provided internally
will now be more readily outsourced. The outsourcing trend allows the health
care provider to focus time and resources on providing health care, giving the
opportunity for growth potential to medical service providers like Omni.
Sources and Availability of Raw Materials and Names of Principal
Suppliers.
----------
None; not applicable.
Dependence on One or a Few Major Customers.
-------------------------------------------
None; not applicable.
Patents, Trademarks, Licenses, Franchises, Concessions, Royalty
Agreements or Labor Contracts.
------------------------------
None; not applicable.
Need for any Governmental Approval of Principal Products or Services.
---------------------------------------------------------------------
Government regulations concerning the privacy of patient's health records
are being phased in at this time. Known as "HIPPA," the effects of these
regulations have been for all healthcare providers and vendors to upgrade both
security and technology of patient records. For Omni as a vendor, it is
compliant with HIPPA regulations and believes these regulations will only
encourage healthcare providers to outsource more medical services.
Effect of Existing or Probable Governmental Regulations on Business.
--------------------------------------------------------------------
Small Business Issuer.
----------------------
The integrated disclosure system for small business issuers adopted by
the Securities and Exchange Commission in Release No. 34-30968 and effective
as of August 13, 1992, substantially modified the information and financial
requirements of a "Small Business Issuer," defined to be an issuer that has
revenues of less than $25 million; is a U.S. or Canadian issuer; is not an
investment company; and if a majority-owned subsidiary, the parent is also a
small business issuer; provided, however, an entity is not a small business
issuer if it has a public float (the aggregate market value of the issuer's
outstanding securities held by non-affiliates) of $25 million or more.
The Securities and Exchange Commission, state securities commissions
and the North American Securities Administrators Association, Inc. ("NASAA")
have expressed an interest in adopting policies that will streamline the
registration process and make it easier for a small business issuer to have
access to the public capital markets.
We are deemed to be a "small business issuer," and we have selected to
comply with the "small business issuer" disclosure requirements of Regulation
SB of the Securities and Exchange Commission.
"Penny Stock" Designation.
--------------------------
Our common stock is "penny stock" as defined in Rule 3a51-1 of the
Securities and Exchange Commission. Penny stocks are stocks:
* with a price of less than five dollars per share;
* that are not traded on a "recognized" national exchange;
* whose prices are not quoted on the NASDAQ automated quotation
system; or
* in issuers with net tangible assets less than $2,000,000, if the
issuer has been in continuous operation for at least three years, or
$5,000,000, if in continuous operation for less than three years, or with
average revenues of less than $6,000,000 for the last three years.
Section 15(g) of the Exchange Act and Rule 15g-2 of the Securities
and Exchange Commission require broker/dealers dealing in penny stocks to
provide potential investors with a document disclosing the risks of penny
stocks and to obtain a manually signed and dated written receipt of the
document before making any transaction in a penny stock for the investor's
account. You are urged to obtain and read this disclosure carefully before
purchasing any of our shares.
Rule 15g-9 of the Securities and Exchange Commission requires
broker/dealers in penny stocks to approve the account of any investor for
transactions in these stocks before selling any penny stock to that investor.
This procedure requires the broker/dealer to:
* get information about the investor's financial situation,
investment experience and investment goals;
* reasonably determine, based on that information, that transactions
in penny stocks are suitable for the investor and that the investor can
evaluate the risks of penny stock transactions;
* provide the investor with a written statement setting forth the
basis on which the broker/dealer made his or her determination; and
* receive a signed and dated copy of the statement from the
investor, confirming that it accurately reflects the investor' financial
situation, investment experience and investment goals.
Compliance with these requirements may make it harder for our
stockholders to resell their shares.
Research and Development.
-------------------------
None; not applicable.
Cost and Effects of Compliance with Environmental Laws.
-------------------------------------------------------
None; not applicable.
Number of Employees.
--------------------
Our Company currently employs 29 employees, of which 25 are full-time.
Item 2. Description of Property.
------------------------
Omni has an interest in three parcels of real property: 1609 West
Street, Montgomery, Alabama, that it is purchasing; 1867 Crane Ridge Drive,
Suite #250-A, Jackson, Mississippi, and 1107 Mt. Rushmore Road, Suite 2, Rapid
City, South Dakota, both of which are leased.
Item 3. Legal Proceedings.
------------------
To the knowledge of our management, no director or executive officer is
party to any action in which any has an interest adverse to us, except that
on October 1, 2003, certain minority shareholders of Omni notified the Company
that they believe that Omni has taken actions that have diluted their
interests. These minority shareholders have demanded the return of certain
assets or a substantial financial settlement to be reached within 15 days.
These minority shareholders have notified the Company of their intentions to
make a filing with the American Arbitration Association pursuant to the
Agreement for the Exchange of Common Stock dated April 15, 2002 if the matter
is not resolved within the 15 day time frame. No such filing has been made
and there have been no stated monetary damages claimed. Management believes
that the issues raised by these minority shareholders is without merit and
management intends to vigorously defend any action, if filed. However, it is
too early to determine the ultimate outcome of the matter.
Item 4. Submission of Matters to a Vote of Security Holders.
----------------------------------------------------
No matter was submitted to the Company's shareholders during the last
quarter of our current fiscal year.
PART II
Item 5. Market for Common Equity and Related Stockholder Matters.
---------------------------------------------------------
Market Information.
-------------------
There has never been any "established trading market" for our shares of
common stock. Our common stock is presently quoted on the OTC Bulletin Board
of the NASD under the symbol "ONMH" as reflected below. No assurance can be
given that any market for our common stock will develop in the future or be
maintained. If an "established trading market" ever develops in the future,
the sale of "restricted securities" (common stock) pursuant to Rule 144 of the
Securities and Exchange Commission by members of management or others may have
a substantial adverse impact on any such market.
The range of high and low bid quotations for our common stock during
each quarter for the last year, are shown below. Prices are inter-dealer
quotations as reported by the NQB, LLC, and do not necessarily reflect
transactions, retail markups, mark downs or commissions.
Stock Quotations
----------------
Quarter Ended High Low
------------- ---- ---
April 1, 2003 through
June 30, 2003 $0.03 $0.03
July 1, 2003 through
August 22, 2003 $0.03 $0.02
August 25, 2003 through
September 30, 2003* $1.25 $0.02
October 1, 2003 through
December 31, 2003 $1.26 $0.30
January 1, 2004 through
March 31, 2004 $0.78 $0.26
*After a 1 for 14.5 reverse split.
Recent Sales of Unregistered Securities.
----------------------------------------
On November 5, 2002, pursuant to Unanimous Consent of the Company's Board
of Directors, the Company resolved to issue 18,000,000 shares of the Company's
"unregistered" and "restricted" $0.001 par value common stock to Jenson
Services, Inc., a Utah corporation, in consideration of $5,000 being advanced
to the Company to meet accounts payable obligations. These shares were
cancelled as a condition to the closing of the Reorganization Agreement with
Omni.
Holders.
--------
As of July 9, 2004, there were 23,898,776 shares of common stock
outstanding and approximately 305 stockholders of record.
Dividends.
----------
We have not paid any cash dividends since our inception and do not
anticipate or contemplate paying dividends in the foreseeable future. It is
the present intention of management to utilize all available funds for the
development of our business.
Securities Authorized For Issuance under Equity Compensation Plans.
-------------------------------------------------------------------
We do not have any Equity Compensation Plans presently in place.
Item 6. Management's Discussion and Analysis or Plan of Operation.
----------------------------------------------------------
"SAFE HARBOR" STATEMENT UNDER THE UNITED STATES PRIVATE SECURITIES LITIGATION
REFORM ACT OF 1995.
This Form 10-KSB contains forward looking statements within the meaning of
Section 27A of the Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934. Omni Medical Holdings, Inc. is referred to herein as
"we" or "our". The words or phrases "would be," "will allow," "intends to,"
"will likely result," "are expected to," "will continue," "is anticipated,"
"estimate," "project," or similar expressions are intended to identify
"forward-looking statements" within the meaning of the Private Securities
Litigation Reform Act of 1995. Actual results could differ materially from
those projected in the forward looking statements as a result of a number of
risks and uncertainties. Statements made herein are as of the date of the
filing of this Form 10-KSB with the Securities and Exchange Commission and
should not be relied upon as of any subsequent date. Except as may otherwise
be required by applicable law, we do not undertake, and specifically disclaim,
any obligation to update any forward-looking statements contained in this Form
10-KSB to reflect occurrences, developments, unanticipated events or
circumstances after the date of such statement.
RESULTS OF OPERATIONS
The year ended March 31, 2004.
------------------------------
During the fiscal year ended March 31, 2004, we recorded revenue of
$1,181,146, as compared to revenue of $96,462 in the year ended March 31,
2003. This increase is principally due to our acquisition of Medical Billing
Management, Inc. ("MBM") on May 30, 2003. Cost of sales also rose
significantly, to $748,710 in the current year, from $0 in the fiscal year
ended March 31, 2003. Again, this increase is principally the result of our
acquisition of MBM.
During the fiscal year ended March 31, 2004, we recorded general and
administrative expenses of $916,631. These expenses totaled $245,599 in the
year-ago period. This increase is primarily due to our acquisition of MBM, as
well as increases in consulting services fees.
Interest expense was $37,298 and $11,876 for the year ended March 31, 2004,
and March 31, 2003, respectively.
For the year ended March 31, 2004, we incurred a loss from continuing
operations of $521,493, as compared to a loss of $128,729 for the year ended
March 31, 2003.
CAPITAL RESOURCE REQUIREMENTS
LIQUIDITY
As of March 31, 2004, Omni's working capital deficit was $543,818. Our cash
at March 31, 2004 was $6,140.
We currently have a commitment under an Employment Agreement with one
of the former owners of McCoy through November 30, 2005, guaranteeing annual
compensation of $30,000 plus a performance based bonus. We currently
lease office space under an operating lease for $6,000 per month, which
terminates July 31, 2006.
Effective October 1, 2003, Omni entered into an Employment Agreement with
Arthur D. Lyons, its chief executive officer and president through December
31, 2008. The agreement provides compensation at an annual base salary of
$150,000 and increases to $180,000 annually the first month Omni's gross
revenue exceeds $450,000 in a month. The Agreement also provides for a
$75,000 bonus to be paid as of February 1, 2004, and awards stock options
based upon revenue targets. As of March 31, 2004, no stock options have
been earned under the Agreement. We have been paying Mr. Lyons' salary since
March, 2004. His salary for the period from October, 2003, through February,
2004, has been paid through the issuance of "unregistered" and "restricted"
shares of our common stock.
During December 2003, Omni entered into a Loan Agreement and Security
Agreement with Presidential Financial Corporation allowing the Company to
borrow up to 80% of its accounts receivable or $300,000, whichever is less.
The loan is secured by accounts receivable and other tangible assets of Omni
and accrues interest at prime plus 2%. As of March 31, 2004 $44,956 was
owed on the line of credit.
Item 7. Financial Statements.
---------------------
Omni Medical Holdings, Inc.
Independent Auditors' Report
and
Consolidated Financial Statements
March 31, 2004
Omni Medical Holdings, Inc.
TABLE OF CONTENTS
Page
Independent Auditors' Report . . . . . . . . . . . . . . . . 1
Consolidated Balance Sheet - March 31, 2004 . . . . . . . . . 2-3
Consolidated Statements of Operations for the Years Ended
March 31, 2004 and 2003 . . . . . . . . . . . . . . . . . . . 4
Consolidated Statements of Stockholders' Equity for the
Years Ended March 31, 2004 and 2003 . . . . . . . . . . . . . 5
Consolidated Statements of Cash Flows for the Years Ended
March 31, 2004 and 2003 . . . . . . . . . . . . . . . . . . . 6-7
Notes to Consolidated Financial Statements . . . . . . . . . 8-19
Independent Auditors' Report
The Board of Directors and Shareholders
Omni Medical Holdings, Inc.
We have audited the accompanying consolidated balance sheet of Omni Medical
Holdings Inc. as of March 31, 2004 and the related consolidated statements of
operations, stockholders' equity, and cash flows for the year then ended.
These financial statements are the responsibility of the Company's management.
Our responsibility is to express an opinion on these consolidated financial
statements based on our audit.
We conducted our audit in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we
plan and perform an 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 consolidated financial position of Omni Medical
Holdings, Inc., and subsidiaries as of March 31, 2004 and the results of
operations and cash flows for the years ended March 31, 2004 and 2003, in
conformity with accounting principles generally accepted in the United States
of America.
The accompanying financial statements have been prepared assuming that Omni
Medical Holdings, Inc. will continue as a going concern. As discussed in Note
9 to the financial statements, the Company has accumulated losses from
operations and a deficit in working capital. These issues raise substantial
doubt about its ability to continue as a going concern. Management's plans in
regard to these matters are also described in Note 9. The financial
statements do not include any adjustment that might result from the outcome of
this uncertainty.
/s/ Mantyla McReynolds
Mantyla McReynolds
Salt Lake City, Utah
July 8, 2004
Omni Medical Holdings, Inc.
Consolidated Balance Sheet
March 31, 2004
ASSETS
Current assets:
Cash and cash equivalents $ 6,140
Accounts receivable, net, including unbilled amounts of
approximately $214,926-Note 1 377,326
Employee advances 3,935
Prepaid expenses 3,834
----------
Total current assets 391,235
Property & equipment, net-Notes 1& 4 262,434
Other assets:
Deposits 380
Deferred financing costs-Note 11 25,000
Goodwill-Note 1 72,300
Intangible assets, net-Note 1 507,482
----------
Total other assets 605,162
----------
TOTAL ASSETS $1,258,831
==========
See accompanying notes to financial statements
F-2
Omni Medical Holdings, Inc.
Consolidated Balance Sheet [continued]
March 31, 2004
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 168,727
Accrued expenses 255,999
Line of credit- Note 6 44,956
Notes payable, current portion-Note 7 465,371
-----------
Total current liabilities 935,053
Notes payable, net of current portion-Note 7 229,532
-----------
Total long-term liabilities 229,532
Total liabilities 1,164,585
Stockholders' equity:-Note 5
Preferred stock, no par value, 1,000,000 shares authorized,
no shares issued and outstanding -
Common stock, par value $0.001 per share; 50,000,000
shares authorized; 15,260,187 issued and outstanding 15,260
Common stock to be issued under reorganization agreement
474,659 shares 475
Capital in excess of par value 1,973,648
Deferred compensation expense (7,342)
Accumulated deficit (1,887,795)
----------
Total stockholders' equity 94,246
----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $1,258,831
==========
See accompanying notes to financial statements
F-3
Omni Medical Holdings, Inc.
Consolidated Statements of Operations
For the years ended March 31, 2004 and 2003
2004 2003
Revenue $1,181,146 $ 96,462
Cost of sales 748,710 -
---------- ----------
Gross operating profit 432,436 96,462
General and administrative expenses 916,631 245,599
---------- ----------
Income (loss) from operations (484,195) (149,137)
Other income (expense):
Interest income - 32,284
Interest expense (37,298) (11,876)
---------- ----------
Total other income (expense) (37,298) 20,408
---------- ----------
Loss from continuing operations before income
taxes (521,493) (128,729)
Provision for income taxes - -
---------- ----------
Loss from continuing operations (521,493) (128,729)
Loss from discontinued operations, net of
taxes-Note 3 (33,736) (386,361)
---------- ----------
Net loss $ (555,229) $ (515,090)
========== ==========
Loss per share basic and diluted:
Continuing operations $ (0.04) $ (0.01)
========== ==========
Discontinued operations $ (0.01) $ (0.02)
========== ==========
Net loss per share-basic and diluted $ (0.04) $ (0.03)
========== ==========
Weighted average number of common shares
outstanding-basic and diluted 14,708,706 19,805,993
========== ==========
See accompanying notes to financial statements
F-4
Omni Medical Holdings, Inc.
Consolidated Statements of Stockholders' Equity
For the Years Ended March 31, 2004 and 2003
Common Additional
Shares Common stock to Paid in
Issued Stock be issued Capital
Balance April 1, 2002 12,305,536 $12,306 $ - $ 885,300
Restatement adjustment at merger
with Piezo, September 5, 2003 6,607,352 6,607 (6,607)
Issuance of common stock in
exchange for note payable 303,134 303 44,697
Sale of common stock pursuant to
private placement 303,134 303 44,697
Stock transferred to employees by
majority shareholder 52,500
Sale of common stock pursuant to
private placements 1,024,628 1,025 498,975
Issuance of common stock in
business acquisition 46,108 46 29,954
Earned compensation expense
Issuance of common stock for
services 30,355 30 14,783
Net loss for year ended
March 31, 2003
---------- ------- ------ ----------
Balance, March 31, 2003 20,620,247 20,620 - 1,564,299
Disposition of subsidiary (7,795,520) (7,795) 31,720
Sale of common stock pursuant to
private placements 92,216 92 44,908
Repurchase of dissenter's common
stock (9,222) (9) (111)
Acquisition of Piezo on September
5, 2003 2,000,000 1,525 475 (17,091)
Sale of common stock pursuant to
stock purchase agreement 577,125 577 224,673
Sale of common stock pursuant to
private placement 235,000 235 120,765
Issuance of common stock for
services 15,000 15 4,485
Earned compensation expense
Net loss for year ended
March 31, 2004
Balance, March 31, 2004 15,734,846 $15,260 $ 475 $ 1,973,648
[CONTINUED]
Omni Medical Holdings, Inc.
Consolidated Statements of Stockholders' Equity
For the Years Ended March 31, 2004 and 2003
Deferred Total
Compen- Advance Stockholders'
sation Accumulated Receivable Equity
Expense Deficit Shareholder (Deficit)
Balance April 1, 2002 $(67,778) $ (817,476) $(24,708) $ (12,356)
Restatement adjustment at merger
with Piezo , September 5, 2003 -
Issuance of common stock in
exchange for note payable 45,000
Sale of common stock pursuant to
private placement 45,000
Stock transferred to employees by
majority shareholder 52,500
Sale of common stock pursuant to
private placements 500,000
Issuance of common stock in
business acquisition 30,000
Earned compensation expense 26,667 26,667
Issuance of common stock for
services 14,813
Net loss for year ended
March 31, 2003 (515,090) (515,090)
-------- ---------- ------- ----------
Balance, March 31, 2003 (41,111) (1,332,566) (24,708) 186,534
Disposition of subsidiary 24,708 48,633
Sale of common stock pursuant to
private placements 45,000
Repurchase of dissenter's common
stock (120)
Acquisition of Piezo on September
5, 2003 (8,793) (23,884)
Sale of common stock pursuant to
stock purchase agreement 225,250
Sale of common stock pursuant to
private placement 121,000
Issuance of common stock for
services 4,500
Earned compensation expense 42,562 42,562
Net loss for year ended
March 31, 2004 (555,229) (555,229)
Balance, March 31, 2004 $ (7,342) $(1,887,795) $ - $ 94,246
-------- ----------- -------- ----------
See accompanying notes to financial statements
F-5
Omni Medical Holdings, Inc.
Consolidated Statements of Cash Flows
For the years ended March 31, 2004 and 2003
2004 2003
CASH FLOWS FROM OPERATING ACTIVITIES
Loss from continuing operations $ (521,493) $ (128,729)
Loss from discontinued operations (33,736) (386,361)
Adjustments to reconcile net loss to
net cash used in continuing operations:
Depreciation and amortization 116,680 25,937
Stock-based compensation expense 33,769 93,980
Stock issued for services 4,500 -
Changes in operating assets and
liabilities, net of effect of business
acquisition and disposition:
Accounts receivable (298,074) 9,418
Employee advances (3,935) -
Prepaid expenses (3,834) -
Inventories disposed of with
subsidiary 400,888 146,807
Deposits (380) -
Accounts payable (103,931) 996
Accrued expenses 225,741 (11,135)
------------ ------------
Net cash used in operating
activities (183,805) (249,087)
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of property and equipment (15,649) (54,960)
Payment for disposition of subsidiary, net (36,000) -
Payments for purchase of businesses (475,094) (65,000)
----------- ------------
Net cash used in investing
activities (526,743) (119,960)
CASH FLOWS FROM FINANCING ACTIVITIES
Repurchase of dissenter's common stock (120) -
Deferred financing costs (25,000) -
Borrowings on line of credit 44,956 -
Proceeds from issuance of debt 75,000 125,000
Payments of notes payable (27,361) (52,334)
Proceeds from the issuance of common stock 391,250 545,000
------------ ------------
Net cash provided by
financing activities 458,725 617,666
------------ ------------
NET INCREASE (DECREASE) IN CASH (251,823) 248,619
CASH AT BEGINNING OF YEAR 257,963 9,344
------------ ------------
CASH AT END OF YEAR $ 6,140 $ 257,963
============ ============
See accompanying notes to financial statements
F-6
Omni Medical Holdings, Inc.
Consolidated Statements of Cash Flows [continued]
For the years ended March 31, 2004 and 2003
2004 2003
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid for interest in continuing operations $ 37,298 $ 10,872
Cash paid for interest in discontinued operations 1,402 34,841
Cash paid for income taxes - -
SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND
FINANCING ACTIVITIES:
Conversion of debt to equity $ - $ 45,000
BUSINESS ACQUISITIONS:
Fair value of assets acquired $ 795,968 $ 184,761
Issuance of debt/assumption of liabilities (320,874) (89,761)
Common stock issued at acquisition - (30,000)
------------ -----------
Cash paid $ 475,094 $ 65,000
============ ===========
See accompanying notes to financial statements
F-7
Omni Medical Holdings, Inc.
Notes to Consolidated Financial Statements
March 31, 2004
Note 1 ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Business - Omni Medical Holdings, Inc. ("Omni"), a Utah corporation,
provides medical billing and transcription services to medical
practitioners in Alabama, Mississippi, South Dakota and Kentucky.
Organization - The company was previously organized as Piezo
Instruments, Inc. ("Piezo"), a Utah corporation. Effective September 5,
2003, Piezo and Omni Medical of Nevada, Inc., a Nevada Corporation
("Omni Nevada") executed an Agreement and Plan of Reorganization (the
"Reorganization Agreement"), whereby Piezo agreed to acquire 100% of the
issued and outstanding shares of common stock of Omni Nevada in exchange
for up to 16,000,000 newly issued shares of common stock of Piezo, (of
which 12,443,062 have been issued as of March 31, 2004 and 474,659
shares are to be issued as of March 31, 2004 for a total of 12,907,721
shares,) or approximately 86% of the post-Reorganization Agreement
outstanding securities of Piezo. The transaction was accounted for as a
reverse acquisition of Piezo by Omni Nevada. Shares of common stock
authorized and issued have been retroactively restated to present the
capital structure of Piezo. Concurrent with the merger, Piezo changed
its name to Omni Medical Holdings, Inc.
At the closing, and excluding the shares exchanged for Omni, the
outstanding common stock of Piezo totaled 2,000,000 shares, after taking
into account a 1 for 14.5 reverse split and the following transactions:
1. In consideration of the closing of the Reorganization Agreement,
certain principal stockholders of Piezo (i) delivered 1,466,379 post-
split shares of Piezo for cancellation, which included 225,000 post-
split shares of common stock underlying an option granted to one of the
canceling stockholders; and (ii) waived any registration rights that had
been granted to them or were applicable to any of the cancelled shares.
In exchange for the cancellation of these shares and the waiver of any
registration rights, Piezo issued an aggregate of 500,000 post-split
newly issued shares of common stock to the canceling stockholders. 2.
Piezo issued 293,104 shares of common stock to certain principal
stockholders of Piezo in exchange for services to be rendered under a
six month consulting agreement, resulting in consulting expense of
approximately $8,800.
As of October 31, 2003, the deadline for completing the share exchange
transaction with Piezo, approximately 81% of Omni's outstanding shares
had been tendered to the Company in accordance with the instructions for
exchanging shares (12,443,062 have been issued as of March 31, 2004 and
474,659 shares are to be issued as of March 31, 2004 for a total of
12,907,721 shares). The other 19% of Omni's outstanding shares had
taken no action whatsoever and continue to own a minority interest in
the Company's subsidiary, Omni Nevada. Shareholders of approximately
9,222 post recapitalization shares exercised their rights to dissent,
and the Company repurchased the shares for $120.
On December 31, 2003, pursuant to the unanimous consent of the board of
directors for Omni Medical of Nevada and Omni Medical Holdings, Inc.,
Omni Medical of Nevada sold, assigned and transferred to Omni Medical
Holdings, Inc all shares of the common stock of Omni Medical Services,
Inc. for $100.00.
Principles of consolidation-The accompanying consolidated financial
statements include the accounts of Omni Medical Holdings, Inc., its
wholly owned subsidiary, Omni Medical Services, Inc. and its majority
owned subsidiary, Omni Medical of Nevada, Inc. All significant
intercompany balances and transactions are eliminated.
Cash and cash equivalents- The Company considers all highly liquid
investments with original maturities at the date of purchase of three
months or less to be cash equivalents.
F-8
Omni Medical Holdings, Inc.
Notes to Consolidated Financial Statements
March 31, 2004
Note 1 ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES[continued]
Revenue recognition- The Company recognizes revenue according to Staff
Accounting Bulletin 104, Revenue Recognition in Financial Statements
which clarifies U.S. generally accepted accounting principles for
revenue transactions. The Company recognizes revenue from two sources,
medical billing and medical transcription services. Fees for the medical
billing services are primarily based on a percentage of net collections
on our clients' accounts receivable. Revenue is recognized for these
services when the service is performed for the client based on the
Company's percentage of the clients estimated collections. Revenues on
the medical transcription services are recognized monthly as services
are performed for our clients.
Use of estimates in preparation of financial statements- The preparation
of financial statements in conformity with U.S. 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.
Bad debt and allowance for doubtful accounts- The allowance for doubtful
accounts is maintained at a level sufficient to provide for estimated
credit losses based on evaluating known and inherent risks in the
receivables portfolio. The Company provides an allowance for doubtful
accounts which, based upon management's evaluation of numerous factors,
including economic conditions, a predictive analysis of the outcome of
the current portfolio and prior credit loss experience, is deemed
adequate to cover reasonably expected losses inherent in outstanding
receivables. The allowance at March 31, 2004 is $32,239.
Concentrations of credit risk-The Company grants credit to its
customers, generally without collateral. At March 31, 2004, two
customers accounted for 42% of accounts receivable. During the years
ended March 31, 2004 two customers accounted for 35% of sales, and
during the year ended March 31, 2003 no one customer accounted for 10%
or more of sales.
Property and equipment- Property and equipment are stated at cost.
Expenditures for maintenance and repairs are charged to expense as
incurred. The following is a summary of the estimated useful lives and
depreciation methods used in computing depreciation expense:
Asset Depreciation Estimated
Method useful life
Computer Equipment Straight-line 3 years
Office Equipment Straight-line 5 years
Furniture & Fixtures Straight-line 7 years
Equipment - Manufacturing Straight-line 7 years
Building & Land - Alabama Straight-line 25 years
F-9
Omni Medical Holdings, Inc.
Notes to Consolidated Financial Statements
March 31, 2004
Note 1 ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES[continued]
Goodwill and intangible assets-The Company adopted Statement of
Financial Accounting Standards ("SFAS") No. 142 "Goodwill and Other
Intangible Assets". SFAS No. 142 addresses the accounting and reporting
for acquired goodwill and other intangible assets. The Company's
goodwill consists $36,000 applicable the A&V medical transcription
acquisition in July 2002 and $36,300 applicable to the Medical Billing
Management purchase in May 2003. The Company continually tests goodwill
for impairment and recognizes a loss when the carrying value exceeds the
fair value. The Company has recorded no impairment charges for the years
ended March 31, 2004 and 2003.The intangible asset consists of customer
lists acquired in the acquisitions of A&V, Medical Billing Management
and McCoy Business Services, Inc. as well as a trade name and non-
compete agreements acquired in the McCoy acquisition. The intangible
assets are being amortized over their useful life of between 2 and 5
years. Amortization expense for the years ended March 31, 2004 and 2003
were approximately $80,100 and $4,300, respectively.
Amortization expense for the next five years is expected to be as
follows:
Year ended
3/31/2005 $148,390
3/31/2006 131,723
3/31/2007 98,392
3/31/2008 94,086
3/31/2009 34,891
Income taxes- The Company complies with the provisions of Statement of
Financial Accounting Standards No. 109 [the Statement], "Accounting for
Income Taxes." The Statement requires an asset and liability approach
for financial accounting and reporting for income taxes, and the
recognition of deferred tax assets and liabilities for the temporary
differences between the financial reporting basis and tax basis of the
Company's assets and liabilities at enacted tax rates expected to be in
effect when such amounts are realized or settled.
Net Loss Per Common share-In accordance with Statement of Financial
Accounting Standards No. 128, "Earnings Per Share," basic loss per
common share is computed using the weighted average number of common
shares outstanding. Diluted earnings per share is computed using
weighted average number of common shares plus dilutive common share
equivalents outstanding during the period using the treasury stock
method. During the years ended March 31, 2004 and 2003 there were no
common share equivalents outstanding.
Stock based compensation-SFAS No. 123, "Accounting for Stock-Based
Compensation" allows companies to choose wether to account for employee
stock-based compensation on a fair-value method, or to account for such
compensation under the intrinsic value method prescribed in Accounting
Principles Board Opinion No. 25, "Accounting for Stock Issued to
Employees" ("APB 25"). The Company has chosen to account for stock-based
compensation using APB 25. At March 31, 2004, the Company had no stock
option plans.
F-10
Omni Medical Holdings, Inc.
Notes to Consolidated Financial Statements
March 31, 2004
Note 1 ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES[continued]
Fair value of financial instruments- The carrying amounts of the
Company's cash and cash equivalents, accounts receivable and accounts
payable approximate fair values due to the short maturities of these
instruments. The carrying value of the Company's short-term borrowings
approximates fair value based on the Company's current incremental
borrowing rate for similar types of borrowing arrangements. The fair
values of the company's receivables and payables to related parties are
not practicable to estimate due to the related party nature of the
underlying transactions and indefinite payments terms.
Derivative transactions- During the year ended March 31, 2003, the
Company utilized certain short-term derivative instruments, options and
puts of marketable equity securities, for trading purposes. The Company
accounted for these transactions at fair value, based on market quotes
and cash settlements, These transactions exposed the Company to certain
market and credit risks related to the underlying investment and the
counter-party, respectively. Included in interest income for the year
ended March 31, 2003 is approximatley $30,000 of gains from these
transactions. The Company had no such transaction during the year ended
March 31, 2004 and held no derivative instruments at March 31, 2004 and
2003.
Recent Accounting pronouncements- In June 2002, SFAS No. 146, Accounting
for Costs Associated with Exit or Disposal Activities, was issued. SFAS
No. 146 requires recording costs associated with exit or disposal
activities at their fair values when a liability has been incurred.
Under previous guidance, certain exit costs were accrued upon
management's commitment to an exit plan, which is generally before a
liability has been incurred. The Company adopted SFAS No. 146 in
September of 2003. The adoption of SFAS No. 146 did not materially
impact the Company's consolidated results of operations, financial
position, or cash flow.
In December 2002, the FASB issued SFAS No. 148, Accounting for Stock-
Based Compensation-Transition and Disclosure. SFAS No. 148 amends SFAS
No. 123 to provide alternative methods of transition for a voluntary
change to the fair value based method of accounting for stock-based
employee compensation. In addition, SFAS No. 148 amends the disclosure
requirements of SFAS No. 123 to require prominent disclosures in both
annual and interim financial statements about the method of accounting
for stock-based employee compensation and the effect of the method used
on reported results. The provisions of SFAS No. 148 are effective for
financial statements for fiscal years and interim periods ending after
December 15, 2002. The disclosure provisions of SFAS No. 148 have been
adopted by the Company (see Stock-Based Compensation above).
SFAS No. 150, Accounting for Certain Financial Instruments with
Characteristics of both Liability and Equity ("SFAS No. 150") was issued
in May 2003. SFAS No. 150 establishes standards for how an issuer
classifies and measures certain financial instruments with
characteristics of both liability and equity in its statement of
financial position. SFAS No. 150 became effective for the Company for
new or modified financial instruments beginning June 1, 2003, and for
existing instruments beginning June 28, 2003. The adoption of SFAS No.
150 did not have a material impact on the Company's Consolidated
Financial Statements.
F-11
Omni Medical Holdings, Inc.
Notes to Consolidated Financial Statements
March 31, 2004
Note 1 ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES[continued]
In November 2002, the Financial Accounting Standards Board ("FASB")
issued Financial Accounting Standards Board Interpretation No. ("FIN")
45, Guarantor's Accounting and Disclosure Requirements for Guarantees,
Including Indirect Guarantees of Indebtedness of Others, which requires
the guarantor to recognize as a liability the fair value of the
obligation at the inception of the guarantee. The disclosure
requirements in FIN 45 are effective for financial statements of interim
or annual periods ending after December 15, 2002. Management believes
the Company has no guarantees that are required to be disclosed in the
financial statements. The recognition provisions are to be applied on a
prospective basis to guarantees issued after December 31, 2002. The
adoption of the recognition provisions of FIN 45 did not have a material
impact on the Company's financial statements.
In January 2003, the FASB issued FIN No. 46, Consolidation of Variable
Interest Entities, an interpretation of Accounting Research Bulletin
("ARB") No. 51. FIN No. 46, as revised in December 2003, addresses
consolidation by business enterprises of variable interest entities. FIN
No. 46 applies immediately to variable interest entities created after
January 31, 2003, and to variable interest entities in which an
enterprise obtains an interest after that date. FIN No. 46 applies in
the first year or interim period ending after December 15, 2003, to
variable interest entities in which an enterprise holds a variable
interest that it acquired before February 1, 2003. The adoption of FIN
No. 46 did not have a material impact on the Company's financial
statements.
Note 2 BUSINESS ACQUISITIONS
Effective December 1, 2003, Omni, through its wholly-owned subsidiary,
Omni Medical Services, Inc., ("OMS"), completed an asset purchase
agreement with McCoy Business Services, Inc. ("McCoy"), a corporation
based in Kentucky and a provider of medical transcription services. The
aggregate purchase price was $391,989, including $156,300 payable at
closing, and $235,689 payable in eight equal quarterly installments of
$30,000 beginning on February 29, 2004. The quarterly payments are
subject to an earn-out provision to be calculated based on a multiple of
the amount by which revenues for each quarter are greater or less than a
baseline amount. The adjustments will be recorded as an adjustment to
the acquisition cost of McCoy. The first quarterly payment paid on March
31, 2004 was reduced by $1,878, the second quarterly payment was reduced
by $2,433.
The following table summarizes the estimated fair values of the assets
acquired as of December 1, 2003, the date of acquisition. The
allocation of the purchase price is subject to refinement.
Furniture and equipment $ 60,000
Intangible asset - customer list 135,689
Intangible asset - covenant not to compete 100,000
Intangible asset - trade name 60,000
Goodwill 36,300
--------
Net assets acquired $391,989
========
F-12
Omni Medical Holdings, Inc.
Notes to Consolidated Financial Statements
March 31, 2004
Note 2 BUSINESS ACQUISITIONS [continued]
Effective May 30, 2003, Omni, through OMS, completed an asset purchase
agreement with Medical Billing Management, Inc. ("MBM"), a corporation
based in Mississippi and a provider of medical billing and collection
services to medical practitioners. The aggregate purchase price was
$403,979, including $150,000 paid at closing, $75,000 payable on
November 30, 2003 (paid in February 2004) and $215,279 payable on May
31, 2004 (unpaid as of July 5, 2004). The May 31, 2004 payable was
subject to an adjustment which was calculated based on a multiple of the
amount by which revenues for the year ending May 31, 2004 was less than
a baseline amount. The adjustment reduced the acquisition cost of MBM
by $46,021. The following table summarizes the estimated fair values of
the assets acquired as of May 30, 2003, the date of acquisition. The
aggregate purchase price was discounted by $20,000 to impute interest on
the non-interest bearing debt payable on November 30, 2003 and May 31,
2004. This discount has resulted in a $20,000 decrease to the amount
included in intangible assets from the Company's initial allocation of
the purchase price.
Accounts receivable, net $ 62,000
Furniture and equipment 78,000
Intangible asset-customer list 263,979
--------
Net assets acquired $403,979
Effective July 10, 2002, Omni entered into an asset purchase agreement
with A&V Digital Transcription Services ("A&V"), a general partnership
and provider of medical transcription services based in Alabama. On
September 4, 2002, Omni formed Omni Medical Services, Inc., (formerly
Mastel Precision Health Information Services, Inc. and a wholly-owned
subsidiary of Omni) to operate the transcription services business
acquired from A&V.
The aggregate purchase price was $95,000, including $65,000 in cash,
assumption of liabilities of $90,000 and common stock valued at $30,000.
The following table summarizes the estimated fair values of the assets
acquired and the liabilities assumed at July 10, 2002, the date of
acquisition.
Current assets $ 8,000
Property, plant and equipment 109,000
Intangible asset-customer list 32,000
Goodwill 36,000
--------
Total assets acquired 185,000
Current liabilities (19,000)
Long-term debt (71,000)
--------
Total liabilities assumed (90,000)
--------
Net assets acquired $ 95,000
========
F-13
Omni Medical Holdings, Inc.
Notes to Consolidated Financial Statements
March 31, 2004
Note 2 BUSINESS ACQUISITIONS [continued]
The McCoy, MBM and A&V acquisitions were accounted for as purchases and
their results of operations are included in the Company's financial
statements from the dates of acquisition. Goodwill arising on the
acquisition of A&V and McCoy is expected to be fully deductible for tax
purposes. Intangible assets (customer lists and trade names) acquired
from McCoy, MBM and A&V are expected to be amortized over 5 years and
the covenant not to compete acquired from McCoy is to be amortized over
2 years.
Note 3 DISCONTINUED OPERATIONS
Through May 2, 2003, Omni also produced handheld surgical instruments
used by ophthalmic surgeons in refractive, corneal and LASIK surgeries
and was also a developer of technology to ophthalmic surgeons,
specifically within the domain of anterior segment cataract extraction,
and foldable intra ocular lens placement as well as keratorefractive
procedures such as LASIK. Omni operated its surgical instruments
business through its wholly-owned subsidiary, Mastel Precision Surgical
Instruments, Inc ("MPSI") out of its facility in Rapid City, South
Dakota.
Effective May 2003, Omni entered into an agreement with one of its
officers and shareholders whereby Omni agreed to exchange 100% of the
common stock of MPSI and $36,000 cash for all shares of common stock of
Omni owned individually or jointly by the officer and his wife. As of
April 30, 2003, the assets of MPSI had a carrying value of approximately
$442,000 (primarily accounts receivable of approximately $53,000,
inventories of approximately $387,000 and property and equipment of
approximately $30,000) and MPSI's obligations and liabilities had a
carrying value of approximately $527,000 (primarily accounts payable of
approximately $226,000 and debt of approximately $286,000). Due to the
related party nature of the transaction, no gain was recognized and
shareholders equity was increased by $49,000. The results of operations
from MPSI have been retroactively restated as discontinued operations.
The following proforma financial information presents results as if the
MBM and McCoy acquisitions had occurred at the beginning of the years
ended March 31, 2004 and 2003:
2004 2003
Revenues $1,962,908 $2,071,285
Net loss (484,186) (344,277)
Basic and diluted loss per share $ (0.03) $ (0.02)
F-14
Omni Medical Holdings, Inc.
Notes to Consolidated Financial Statements
March 31, 2004
Note 4 PROPERTY AND EQUIPMENT
The major categories of property and equipment are as follows:
3/31/2004
Computer Equipment $ 96,349
Office Equipment 37,525
Furniture & Fixtures 45,286
Equipment - Manufacturing 45,050
Building & Land - Alabama 85,000
Accumulated depreciation (46,776)
---------
Net property and equipment 262,434
=========
Depreciation expense was $36,514 in 2004, and $21,633 in 2003.
Note 5 STOCKHOLDERS' EQUITY
During the year ended March 31, 2004, 327,216 shares of common stock of
the Company were issued in private placements at prices ranging from
$0.50 to $0.75 per share. The sale of 200,000 shares at $0.50 per share
was with the wife of the Company's chief executive officer and
president.
In December 2003, the Company entered into a Stock Escrow Agreement with
an unrelated third party through which the Company issued 577,125 shares
of restricted common stock to offshore investors pursuant to Regulation
S, promulgated under the Securities Act of 1933. Pursuant to the
agreement the escrow agent remitted 40 percent (40%) of the offer price
or, $225,250 to the Company.
In March 2004, the Company issued 15,000 shares of restricted common
stock to an individual as an exit fee related to a possible acquisition
of the individuals company. Management has estimated the fair market
value of the exit fee as $4,500, which has been recorded as an expense
in the accompanying financial statements.
During the year ended March 31, 2003 1,327,762 post re-organization
shares of common stock were issued in private placements at prices
ranging from $0.14 to $0.49 per share; 303,134 post re-organization
shares of common stock were issued in exchange for a note payable to an
officer of the Company in the amount of $45,000 and 46,108 post re-
organization shares of common stock valued at $30,000 were issued in
connection with the Company's acquisition of the assets of A&V. During
the year ended March 31, 2003, the Company's founding shareholder
awarded 230,100 of his shares of the Company's common stock to Company
employees. The Company has accounted for this award as a capital
contribution by the founding shareholder resulting in compensation
expense and an increase in additional paid-in capital of $52,500. Also
during the year ended March 31, 2003, the Company reserved 130,000
shares of common stock for issuance to employees as compensation.
Certain employees and directors were awarded 30,355 post re-organization
shares of common stock valued at $0.49 per share resulting in
compensation expense of $14,813.
F-15
Omni Medical Holdings, Inc.
Notes to Financial Statements
March 31, 2004
Note 6 LINE OF CREDIT
On December 19, 2003 the Company entered into a loan agreement and
security agreement with Presidential Financial Corporation allowing the
Company to borrow up to 80% of its accounts receivable or $300,000
whichever is less. The loan is secured by accounts receivable and other
tangible assets of the Company and accrues interest at prime plus 2%. As
of March 31, 2004, the Company owed $44,956 on the line of credit.
Note 7 LONG-TERM DEBT
The following is a summary of the Company's indebtedness as of March
31, 2004:
Note payable, interest at 5%, payable in a lump sum payment,
originally due, May 2004, collateralized by the assets of MBM $315,906
Note payable, interest at 5%, payable in quarterly payments of
$30,000, due November 2005, collateralized by the assets of McCoy 207,867
Note payable, interest at 8%, payable in monthly installments
of $1,956, due July 2009 collateralized by all of the assets
of the company 101,998
Note payable, interest at 7.9%, payable in monthly installments
of $590, due July 2016, collateralized by land and building 56,115
Note payable, related party, interest at 5%, payable in monthly
installments of $375, due September 2004 12,130
Note payable, interest at 3.2%, payable in monthly installments
of $905, due May 2004 887
----------
Total $ 694,903
==========
Future minimum note payments as of March 31, 2004, are approximately as
follows:
Year Ending March 31: Amount
2005 $465,371
2006 109,937
2007 21,611
2008 23,426
Thereafter 74,558
--------
$694,903
========
F-16
Omni Medical Holdings, Inc.
Notes to Financial Statements
March 31, 2004
Note 8 LEASES
The following is a schedule by years of future minimum lease payments
required under operating leases that have initial or remaining
noncancellable lease terms in excess of one year as of March 31, 2004:
Year ended Total
March 31, 2005 $ 100,952
March 31, 2006 90,314
March 31, 2007 24,475
Thereafter -
---------
Totals $ 215,741
=========
Note 9 INCOME TAXES
Below is a summary of deferred tax asset calculations on net operating
loss carry forward amounts. Loss carry forward amounts expire through
2023. A valuation allowance is provided when it is more likely than not
that some portion of the deferred tax asset will not be realized.
NOL
Description Balance Tax Rate
Federal Income Tax $1,877,795 $638,450 34%
Valuation allowance (638,450)
--------
Deferred tax asset
3/31/2004 $ 0
========
Note 10 GOING CONCERN
The Company's financial statements for the years ended March 31, 2004
and 2003 show incurred net losses of $555,229, and $515,090,
respectively, and has a working capital deficiency of $543,818, as of
March 31, 2004, raising substantial doubt about the company's ability to
continue as a going concern. Management's plans to address concerns
raised by this issue include:
a. The disposition of MPSI will allow the Company to
concentrate on its medical billing and transcription
operations, which management believes can be operated more
profitably than MPSI. MPSI's operating losses for the years
ended March 31, 2004 and 2003 were approximately $33,700 and
$386,300, respectively.
b. Management expects that cash flows will increase as a result
of the Company's disposition of MPSI and it's acquisition of
transcription and medical billing businesses.
c. During December 2003, Omni entered into a loan agreement and
security agreement with Presidential Financial Corporation
allowing the Company to borrow up to 80% of its accounts
receivable or $300,000 whichever is less. The loan is
secured by accounts receivable and other tangible assets of
OMS and accrues interest at prime plus 2%.
F-17
Omni Medical Holdings, Inc.
Notes to Financial Statements
March 31, 2004
Note 10 GOING CONCERN [continued]
d. The Company is currently pursuing additional sources of
liquidity in the form of commercial credit or additional
sales of the Company's equity securities to fund a
combination of short-term working capital requirements and
growth
There is no assurance that these or any efforts will be successful.
However, management believes that these measures will enable the Company
to have adequate funds to support operations for the next twelve months.
Note 11 RELATED PARTY TRANSACTIONS
During the year ended March 31, 2003 the Company transferred inventory
with a carrying value of approximately $20,000 to an officer and
shareholder of the Company in exchange for a receivable. The shareholder
used the inventory for promotional and other sales purposes on behalf of
the Company. The Company entered into an agreement with the officer and
shareholder whereby the receivable was to be settled in exchange for
32,944 shares of treasury stock, which management believes is the fair
value of the stock. Accordingly, the amounts receivable from the
shareholder have been shown as a reduction of stockholders equity at
March 31, 2003. This agreement was terminated in connection with the
disposition of MPSI in May 2003, and the receivable was acquired by the
shareholder.
Note 12 COMMITMENTS AND CONTINGENCIES
In 2003, the Company retained the services of an investment banking firm
to raise capital for future acquisitions. Through March 31, 2004 the
Company has paid $25,000 in deferred financing costs which will be
offset against future equity proceeds.
In conjunction with the MBM acquisition, Omni entered into an employment
agreement with one of the MBM's former owners, guaranteeing employment
with Omni through May 30, 2004 at an annual salary of $50,000 plus a
performance based bonus.
In conjunction with the McCoy acquisition, Omni entered into an
employment agreement with one of the McCoy's former owners, guaranteeing
employment with Omni through November 30, 2005 at an annual salary of
$30,000 plus performance based bonuses and benefits.
Omni entered into an employment agreement with its chief executive
officer and president commencing October 1, 2003 through December 31,
2008. The agreement provides compensation at an annual base salary of
$150,000 and increases to $180,000 annually the first month Omni's gross
revenue exceeds $450,000 in a month. The agreement also provided for a
$75,000 bonus to be paid on February 1, 2004 and awards stock options
based upon achieving revenue targets. As of March 31, 2004, no stock
options have been earned under the agreement. The $75,000 bonus has been
accrued in these financial statements.
On October 1, 2003, certain minority shareholders of Omni notified the
Company that they believe that
F-18
Omni Medical Holdings, Inc.
Notes to Financial Statements
March 31, 2004
Note 12 COMMITMENTS AND CONTINGENCIES [continued]
Omni has taken actions that have diluted their interests. These
minority shareholders have demanded the return of certain assets or a
substantial financial settlement to be reached within 15 days. These
minority shareholders have notified the Company of their intentions to
make a filing with the American Arbitration Association pursuant to the
Agreement for the Exchange of Common Stock dated April 15, 2002 if the
matter is not resolved within the 15 day time frame. No such filing has
been made and there have been no stated monetary damages claimed.
Management believes that the issues raised by these minority
shareholders is without merit and management intends to vigorously
defend any action, if filed. However, it is too early to determine the
ultimate outcome of the matter.
Note 13 SUBSEQUENT EVENTS
On July 6, 2004 the Company announced it has reached agreement to
acquire a medical service provider based in the midwest. Closing is
scheduled for July 15, 2004.
On June 29, 2004 the Company retained the services of Andrew &
Associates, Inc. as its Investor Relations and Public Relations
consulting firm.
During April, May and June 2004 , 8,276,239 shares of common stock of
the Company were issued in private placements at prices ranging from
$0.32 to $0.40 per share.
F-19
Item 8. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure.
---------------------
On May 10, 2004, our Board of Directors resolved to dismiss Gelfand,
Hochstadt Pangburn, P.C., as our principal independent accountant and to
retain Mantyla McReynolds, Certified Public Accountants, of Salt Lake City,
Utah, as our new principal independent accountant, and to audit our financial
statements for the fiscal year ended March 31, 2004. See Item 13 of this
Report.
Item 8(a). Controls and Procedures.
------------------------------------
As of the end of the 90 day period at the end of this Annual Report, we
carried out an evaluation, under the supervision and with the participation
of our Chief Executive Officer, of the effectiveness of the design and
operation of our disclosure controls and procedures. Based on this
evaluation, our Chief Executive Officer concluded that our disclosure controls
and procedures are effective in timely alerting them to material information
required to be included in our periodic reports that are filed with the
Securities and Exchange Commission. It should be noted that the design of any
system of controls is based in part upon certain assumptions about the
likelihood of future events, and there can be no assurance that any design
will succeed in achieving its stated goals under all potential future
conditions, regardless of how remote. In addition, we reviewed our internal
controls, and there have been no significant changes in our internal controls
or in other factors that could significantly affect those controls subsequent
to the date of their last evaluation.
PART III
Item 9. Directors, Executive Officers, Promoters and Control Persons;
Compliance with Section 16(a) of the Exchange Act.
--------------------------------------------------
Identification of Directors and Executive Officers.
---------------------------------------------------
The following table sets forth the name, address, age and position
of each officer and director of the Company:
Name Age Position
---- --- --------
Arthur D. Lyons 45 President, CEO, and Director
John Globoker 30 Corporate Vice President, Secretary
and Director
Lance Weaver 44 Director
Term of Office.
---------------
Directors are elected by our stockholders to serve until the next
annual meeting of our stockholders or until their successors have been elected
and have duly qualified. Officers are appointed to serve until the annual
meeting of our Board of Directors following the next annual meeting of our
stockholders and until their successors have been elected and have qualified.
The following is a summary of the business experience of each of our
current directors and executive officers:
Arthur D. Lyons. Since 1980, Mr. Lyons has held positions with
Merrill Lynch, E.F. Hutton, Prudential Securities and PaineWebber as
investment representative, pension consultant, trader and portfolio manager.
In 1999, Mr. Lyons formed LHM Trading, an investment firm, and in 2000,
founded Interstate Advisors, Inc., a registered investment advisor. Mr.
Lyons' broad financial experience has provided him with a solid background in
the financial and investment fields. He holds a B.A. Degree in sociology with
a minor in accounting from Samford University in Birmingham, Alabama, in 1979.
John L. Globoker. Mr. Globoker was appointed Corporate Vice President
and Secretary October, 1, 2003. He graduated from the University of Northern
Colorado in Greeley, Colorado and earned his MBA from National American
University in 2002. John has extensive marketing experience in the areas of
human resources, finance and marketing primarily through his association with
the Nash Finch Co. Mr. Globoker joined the Company in mid 2003, and was
promoted to senior management shortly thereafter.
Lance Weaver. Director, graduated in 1982 from the South Dakota School
of Mines and Technology with a degree in Mechanical Engineering. Over the past
twenty years, he has owned and operated several businesses. Currently he is
Vice President and shareholder in Lloyd's, Inc., an international company,
based in Rapid City, South Dakota, that engineers and manufactures inspection
and security robots and cameras.
Family Relationships.
---------------------
There are no family relationships between Mr. Lyons, Mr. Globoker and Mr.
Weaver.
Involvement in Certain Legal Proceedings.
-----------------------------------------
During the past five years, none of our present or former directors,
executive officers or persons nominated to become directors or executive
officers:
(1) Filed a petition under the federal bankruptcy laws or any state
insolvency law, nor had a receiver, fiscal agent or similar officer appointed
by a court for the business or property of such person, or any partnership in
which he was a general partner at or within two years before the time of such
filing, or any corporation or business association of which he was an
executive officer at or within two years before the time of such filing;
(2) Was convicted in a criminal proceeding or named subject of a
pending criminal proceeding (excluding traffic violations and other minor
offenses);
(3) Was the subject of any order, judgment or decree, not
subsequently reversed, suspended or vacated, of any court of competent
jurisdiction, permanently or temporarily enjoining him or her from or
otherwise limiting his involvement in any type of business, securities or
banking activities;
(4) Was found by a court of competent jurisdiction in a civil
action, by the Securities and Exchange Commission or the Commodity Futures
Trading Commission to have violated any federal or state securities law, and
the judgment in such civil action or finding by the Securities and Exchange
Commission has not been subsequently reversed, suspended, or vacated.
Compliance with Section 16(a) of the Exchange Act.
--------------------------------------------------
We believes all forms required to be filed under Section 16 of the
Exchange Act for all of the Company's directors and executive officers have
been timely filed.
Audit Committee.
----------------
We have not adopted an audit committee as of the date of this Report. We
will disclose when and if we do adopt an audit committee in the future.
Code of Ethics.
---------------
We have adopted a Code of Ethics and it is attached as Exhibit 14 to this
Report. See Item 13 of this Report.
Item 10. Executive Compensation.
-----------------------
Cash Compensation.
------------------
The following table shows the aggregate compensation that we have paid to
directors and executive officers for services rendered during the periods
indicated:
SUMMARY COMPENSATION TABLE
Long Term Compensation
Annual Compensation Awards Payouts
(a) (b) (c) (d) (e) (f) (g) (h) (i)
Secur-
ities All
Name and Year or Other Rest- Under- LTIP Other
Principal Period Salary Bonus Annual rictedlying Pay- Comp-
Position Ended ($) ($) Compen-Stock Optionsouts ensat'n
-----------------------------------------------------------------
Arthur D.
Lyons 3/31/04 0 0 0 0 0 0 0
President, 6/30/03 6000* 0 0 0 17777* 0 2200*
CEO,
Director
Charles D. 3/31/04 0 0 0 0 0 0 0
Arbeiter 6/30/03 0 0 0 0 8889* 0 0
COO, Treas.,
Director
John Globoker 3/31/04 16615 0 0 0 0 0 0
Corp. V.P.,
Secretary,
Director
Lance Weaver 3/31/04 0 0 0 0 0 0 0
director
We do not have any stock option, bonus, profit sharing, pension or
similar plan; however, we may adopt such a plan in the future to attract
and/or retain members of management or key employees.
Compensation of Directors
We do not compensate our Directors.
Employment Agreements
In conjunction with the MBM acquisition, Omni entered into an employment
agreement with one of the MBM's former owners, guaranteeing employment with
Omni through May 30, 2004 at an annual salary of $50,000 plus a performance
based bonus.
In conjunction with the McCoy acquisition, Omni entered into an
employment agreement with one of the McCoy's former owners, guaranteeing
employment with Omni through November 30, 2005 at an annual salary of $30,000
plus performance based bonuses and benefits.
Omni entered into an employment agreement with its chief executive
officer and president commencing October 1, 2003 through December 31, 2008.
The agreement provides compensation at an annual base salary of $150,000 and
increases to $180,000 annually the first month Omni's gross revenue exceeds
$450,000 in a month. The agreement also provided for a $75,000 bonus to be
paid as on February 1, 2004 and awards stock options based upon achieving
revenue targets. As of March 31, 2004, no stock options have been earned
under the agreement. The $75,000 bonus has been accrued in these financial
statements.
Item 11. Security Ownership of Certain Beneficial Owners and Management.
---------------------------------------------------------------
The following table sets forth information concerning the beneficial
ownership of Onmi common stock as of July 9, 2004, by each director and
executive officer, all directors and officers as a group, and each person
known to beneficially own 5% or more of its outstanding common stock.
Name and Address Percentage
of Beneficial Owner Shares Owned(1) Owned(1)
------------------- --------------- --------
Arthur D. Lyons 1,668,937 7.0%
2319 Huntington Place
Rapid City, SD 57702
John L. Globoker -0- -0-
Lance Weaver 114,234 (3)
and Cindy Weaver
3921 Mary Drive
Rapid City, SD 57702
Charles D. Arbeiter 1,835,852 7.7%
4311 S. Glenview Place
Rapid City, SD 57702
Langley Park Investments 3,720,930 15.6%
One Great Cumberland Place
London, UK W1H7AL
Al Rieman 2,503,301 10.5%
216 N. Berry Pine Road
Rapid City, SD 57702
LHM Trading (2) 3,045,721 12.7%
1107 Mt. Rushmore Road #2
Rapid City, SD 57701
Warren Shy 1,269,265 5.3%
P. O. Box 1301
Spearfish, SD 57783
Strategic Resources LLC 3,700,000 15.5%
One Great Cumberland Place
London, UK W1H 7AL
Totals: 17,744,006 74.2%
(1) Based upon 23,898,776 outstanding shares.
(2) LHM Trading is controlled by Arthur D. Lyons, the President,
CEO, Secretary and a Director of Omni.
(3) Less than 1%.
Changes in Control.
-------------------
To our knowledge, there are no present arrangements or pledges of our
securities that may result in a change in control of our company.
Item 12. Certain Relationships and Related Transactions.
-----------------------------------------------
Transactions with Management and Others.
----------------------------------------
During the year ended March 31, 2003, Omni transferred inventory with a
carrying value of approximately $20,000, to an officer and shareholder of Omni
in exchange for a receivable. The shareholder used the inventory for
promotional and other sales purposes on behalf of Omni. Omni entered into an
agreement with the officer and shareholder whereby the receivable was settled
in exchange for 32,944 shares of treasury stock, which management believes is
the fair value of the stock. Accordingly, the amounts receivable from the
shareholder to Omni have been shown as a reduction of stockholders equity at
March 31, 2003. This agreement was terminated in connection with the
disposition of MPSI in May 2003, and the receivable was acquired by the
shareholder.
Transactions with Promoters.
----------------------------
Except as outlined under the caption "Transactions with Management,"
during the past two years, there have been no material transactions, series of
similar transactions or currently proposed transactions, to which our company
or any of our subsidiaries was or is to be a party, in which the amount
involved exceeded $60,000 and in which any director or executive officer, or
any security holder who is known to us to own of record or beneficially more
than five percent of our common stock, or any member of the immediate family
of any of the foregoing persons, or any promoter or founder had a material
interest.
Item 13. Exhibits and Reports on Form 8-K.
---------------------------------
Reports on Form 8-K.
8-K Current Report dated December 1, 2003 and filed March 2, 2004,
regarding an Asset Purchase Agreement with McCoy Business Services.*
8-K Current Report dated May 30, 2003 and filed May 10, 2004, regarding
an Asset Purchase Agreement with Medical Billing Management.*
8-K Current Report dated May 10, 2004 and filed May 13, 2004, regarding
the change in accountants.*
Exhibits*
(i)
Where Incorporated
in this Report
--------------
None.
(ii)
Exhibit
Number Description*
------ -----------
14 Code of Ethics**
21 Subsidiaries of the Company**
31 302 Certification of Arthur D. Lyons
32 906 Certification
* Summaries of all exhibits contained within this
Report are modified in their entirety by reference
to these Exhibits.
** These documents and related exhibits have been
previously filed with the Securities and Exchange
Commission and are incorporated herein by reference.
ITEM 15. PRINCIPAL ACCOUNTANT FEES AND SERVICES
The following is a summary of the fees billed to Omni by its principal
accountants during the fiscal years ended March 31, 2004, and March 31, 2003:
Fee category 2004 2003
------------ ---- ----
Audit fees $17,000 $33,000
Audit-related fees $18,000 $ 0
Tax fees $ 0 $ 0
All other fees $ 0 $ 0
Total fees $35,000 $33,000
Audit fees. Consists of fees for professional services rendered by
our principal accountants for the audit of Omni's annual financial statements
and the review of financial statements included in Omni's Forms 10-QSB or
services that are normally provided by our principal accountants in connection
with statutory and regulatory filings or engagements.
Audit-related fees. Consists of fees for assurance and related services
by our principal accountants that are reasonably related to the performance of
the audit or review of Omni's financial statements and are not reported under
"Audit fees."
Tax fees. Consists of fees for professional services rendered by our
principal accountants for tax compliance, tax advice and tax planning.
All other fees. Consists of fees for products and services provided by
our principal accountants, other than the services reported under "Audit
fees," "Audit-related fees" and "Tax fees" above. The fees disclosed in this
category include due diligence, preparation of pro forma financial statements
as a discussion piece for a Board member, and preparation of letters in
connection with the filing of Current Reports on Form 8-K.
SIGNATURES
In accordance with the requirements of the Act, the Registrant
caused this Report to be signed on its behalf by the undersigned, thereunto
duly authorized.
OMNI MEDICAL HOLDINGS, INC.
Date: 12/15/04 /s/ Arthur D. Lyons
--------- --------------------
Arthur D. Lyons, President,
Treasurer and Director
Date: 12/15/04 /s/ John Globoker
--------- ------------------
John Globoker, Vice President,
Secretary and Director