SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act
May 30, 2003
------------
Date of Report
(Date of Earliest Event Reported)
OMNI MEDICAL HOLDINGS, INC.
---------------------------
(Exact Name of Registrant as Specified in its Charter)
Utah 0-26177 87-0425275
---- ------- ----------
(State or other (Commission File No.) (IRS Employer I.D. No.)
Jurisdiction)
1107 Mt. Rushmore Road, Suite 2
Rapid City, South Dakota 57701
-------------------------------
(Address of Principal Executive Offices)
(605) 718-0380
--------------
Registrant's Telephone Number
Not Applicable
--------------
(Former Name or Former Address if changed Since Last Report)
Item 2. Acquisition or Disposition of Assets.
Effective May 30, 2003, Omni Medical Holdings, Inc. ("OMH" or the
"Company"), through its wholly-owned subsidiary, Omni Medical Services, Inc.,
("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 of $450,000, including $150,000 paid at closing,
$75,000 payable on November 30, 2003 (paid in February 2004) and $225,000
payable on May 31, 2004. The May 31, 2004 payment is subject to an adjustment
which is to be calculated based on a multiple of the amount by which revenues
for the year ending May 31, 2004 are more or less than a baseline amount. The
adjustment will be recorded as an adjustment to the acquisition cost of MBM.
The purchase price was allocated $124,564 for equipment, furniture
and other depreciable assets; $135,000 for accounts receivable and work in
process and $100,000 for a related Covenant Not to Compete of Margaret Brown,
MBM's President, who was also given a one year Employment Agreement; and the
balance as goodwill. A complete list of the equipment acquired and the
Employment Agreement are respectively Exhibits A and C to the Asset Purchase
Agreement.
The consideration paid was negotiated "arms length," and the
directors of the Company determined that the consideration for the purchase
was reasonable, under these circumstances.
No director, executive officer or five percent or more stockholder
of the Company had any direct or indirect interest in MBM prior to the
completion of the Asset Purchase Agreement.
For more information regarding this transaction, see the Asset
Purchase Agreement and related Exhibits attached hereto and incorporated
herein by reference. See Item 7 of this Current Report.
Item 7. Financial Statements, Pro Forma Financial Information and
Exhibits.
---------
(a) Financial Statements of Businesses Acquired.
MEDICAL BILLING MANAGEMENT, INC.
FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 2002 AND 2001
THREE MONTHS ENDED MARCH 31, 2003 AND 2002 (UNAUDITED)
MEDICAL BILLING MANAGEMENT, INC.
YEARS ENDED DECEMBER 31, 2002 AND 2001
THREE MONTHS ENDED MARCH 31, 2003 AND 2002 (UNAUDITED)
CONTENTS
Independent Auditor's Report F-1
Financial Statements:
Balance sheets F-2
Statements of operations F-3
Statements of stockholder's equity F-4
Statements of cash flows F-5
Notes to financial statements F-6 - F-10
INDEPENDENT AUDITORS' REPORT
Board of Directors
Medical Billing Management, Inc.
We have audited the accompanying balance sheet of Medical Billing Management,
Inc. ("the Company") as of December 31, 2002, and the related statements of
operations, shareholders' equity and cash flows for the years ended December
31, 2002 and 2001. These financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audits in accordance with auditing standards generally
accepted in the United States of America. Those standards require that we
plan and perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Medical Billing Management,
Inc. as of December 31, 2002, and the results of its operations and its cash
flows for the years ended December 31, 2002 and 2001 in conformity with
accounting principles generally accepted in the United States of America.
/s/Gelfond Hochstadt Pangburn, P.C.
April 20, 2004
Denver, Colorado
F-1
MEDICAL BILLING MANAGEMENT, INC.
BALANCE SHEETS
DECEMBER 31, 2002 AND MARCH 31, 2003 (UNAUDITED)
December 31, March 31,
2002 2003
(unaudited)
ASSETS
Current assets:
Cash $ 29,622 $ 185,913
Accounts receivable, net 172,749 105,994
Work in process 137,600 115,200
Prepaid expenses 31,271 11,296
--------- ---------
Total current assets 371,242 418,403
Furniture and equipment, net 84,912 80,442
--------- ---------
Total assets $ 456,154 $ 498,845
========= =========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 13,718 $ 8,664
Bank overdraft 11,397 0
Accrued salaries and payroll taxes 34,077 41,223
--------- ---------
Total liabilities, all current 59,192 49,887
--------- ---------
Commitments
Shareholders' equity:
Common stock, $1 par value; 1,150
shares issued and outstanding at
December 31, 2002, and March 31, 2003
(unaudited), respectively 1,150 1,150
Retained Earnings 395,812 447,808
--------- ---------
Total shareholders' equity 396,962 448,958
--------- ---------
Total liabilities and shareholders'
equity $ 456,154 $ 498,845
========= =========
See notes to financial statements.
F-2
MEDICAL BILLING MANAGEMENT, INC.
STATEMENTS OF OPERATIONS
YEARS ENDED DECEMBER 31, 2002 AND 2001
THREE MONTHS ENDED MARCH 31, 2003 AND 2002 (UNAUDITED)
Years ended December 31, Three months ended March 31,
2002 2001 2003 2002
(unaudited) (unaudited)
Revenue $1,365,956 $1,564,011 $ 283,261 $ 425,607
Cost of revenue 975,390 907,701 150,244 225,841
---------- ---------- --------- ---------
Gross profit 390,566 656,310 133,017 199,766
General and
administrative expenses 389,607 378,315 81,021 86,438
---------- ---------- --------- ---------
Net income $ 959 $ 277,995 $ 51,996 $ 113,328
========== ========== ========= =========
See notes to financial statements.
F-3
MEDICAL BILLING MANAGEMENT, INC.
STATEMENTS OF SHAREHOLDERS' EQUITY
YEARS ENDED DECEMBER 31, 2002 AND 2001
THREE MONTHS ENDED MARCH 31, 2003 (UNAUDITED)
Retained
Shares Common stock earnings total
Balances, January 1, 2001 1,150 $ 1,150 $316,858 $ 318,008
Dividend distribution to shareholders (100,000) (100,000)
Net income 277,995 277,995
----- ------- -------- ---------
Balances, December 31, 2001 1,150 1,150 494,853 496,003
Dividend distribution to shareholders (100,000) (100,000)
Net income 959 959
----- ------- -------- ---------
Balances, December 31, 2002 1,150 1,150 395,812 396,962
Net income (unaudited) 51,996 51,996
----- ------- -------- ---------
Balances, March 31, 2003 (unaudited) 1,150 $ 1,150 $447,808 $ 448,958
===== ======= ======== =========
See notes to financial statements.
F-4
MEDICAL BILLING MANAGEMENT, INC.
STATEMENTS OF CASH FLOWS
YEARS ENDED DECEMBER 31, 2002 AND 2001
THREE MONTHS ENDED MARCH 31, 2003 AND 2002 (UNAUDITED)
Years ended December 31, Three months ended March 31,
2002 2001 2003 2002
(unaudited) (unaudited)
Net income $ 959 $ 277,995 $ 51,996 $ 113,328
Adjustments to reconcile
net income to net cash
provided by operating
activities:
Depreciation 17,882 10,079 4,470 4,471
Changes in operating
assets and liabilities:
Accounts receivable 4,523 (160,201) 66,756 18,416
Work in process 166,700 (131,800) 22,400 (47,600)
Prepaid expenses (21,151) 3,630 19,975 8,602
Accounts payable 4,370 7,639 (5,054) (3,068)
Bank overdraft 11,397 0 (11,397) 0
Accrued salaries
and payroll taxes (9,344) 32,964 7,146 3,150
--------- ---------- --------- ----------
Net cash provided by
operating activities 175,336 40,306 156,292 97,299
--------- ---------- --------- ----------
Cash flows from investing
activities:
Purchase of property
and equipment (63,277) (30,671) 0 0
--------- ---------- --------- ----------
Net cash used in
investing activities (63,277) (30,671) 0 0
--------- ---------- --------- ----------
Cash flows from financing
activities:
Payments of dividends
to shareholders (100,000) (100,000) 0 0
--------- ---------- --------- ----------
Net cash used in
financing activities (100,000) (100,000) 0 0
--------- ---------- --------- ----------
Net increase (decrease)
in cash 12,059 (90,365) 156,292 97,299
Cash, beginning 17,563 107,928 29,621 17,563
--------- ---------- --------- ----------
Cash, ending $ 29,622 $ 17,563 $ 185,913 $ 114,862
========= ========== ========= ==========
See notes to financial statements.
F-5
MEDICAL BILLING MANAGEMENT, INC.
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 2002 AND 2001
THREE MONTHS ENDED MARCH 31, 2003 AND 2002 (UNAUDITED)
1. Organization and interim financial statements:
Medical Billing Management, Inc, ("the Company"), a Mississippi
corporation, provides medical billing and collection services to
medical practitioners. The Company operates out of its facility in
Jackson, Mississippi.
The balance sheet as of March 31, 2003, the related statements of
operations and cash flows for the three months ended March 31, 2003 and
2002, and the statement of shareholders' equity for the three months
ended March 31, 2003, have been prepared by the Company without audit.
In the opinion of management, all adjustments (which include normal
recurring adjustments) necessary to present fairly the financial
position, results of operations and cash flows for all such periods
have been made. The results of operations for the three months ended
March 31, 2003, are not necessarily indicative of the operating results
for the full year.
2. Significant accounting policies:
Cash and cash equivalents:
Cash and cash equivalents include cash on hand, money market accounts
and short-term investments purchased with an original maturity of three
months or less.
Accounts receivable and concentration of credit risk:
The Company extends credit to its customers in the normal course of
business. The Company maintains reserves for potential credit losses
based upon its loss history and its aging analysis. At December 31,
2002 and March 31, 2003, four customers, individually, accounted for
more than 10% of accounts receivable.
Customers that accounted for more than 10% of revenues are as follows:
December 31, March 31,
2002 2001 2003 2002
(unaudited) (unaudited)
Customer A 27% 23% 2% 24%
Customer B 23% 25% 31% 22%
Customer C 16% 16% 29% 16%
Customer D 8% 9% 12% 8%
F-6
MEDICAL BILLING MANAGEMENT, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
YEARS ENDED DECEMBER 31, 2002 AND 2001
THREE MONTHS ENDED MARCH 31, 2003 AND 2002 (UNAUDITED)
2. Significant accounting policies (continued):
Furniture and equipment:
Furniture and equipment are recorded at cost. Depreciation is provided
by use of straight-line and accelerated methods over the estimated
useful lives of the assets ranging from 3 to 10 years.
The Company periodically evaluates the carrying value of its long-lived
assets for purposes of determining if impairment has occurred. If the
Company determines that impairment has occurred, a loss is recognized
based on the difference between the assets' carrying value and their
estimated fair value. Based upon its review, the Company does not
believe that any impairment has occurred as of December 31, 2002.
Revenue recognition:
Revenue is recognized only after the following criteria are met: (i)
there exists adequate evidence of the transactions; (ii) services have
been performed; and (iii) the price is not contingent on future
activity and (iv) collectibility is assured.
Fair value of financial instruments:
The carrying amounts of the Company's financial instruments approximate
fair values due to the short maturities of these instruments.
Income taxes:
The Company has elected to be taxed under the provisions of Subchapter S
of the Internal Revenue Code. Under these provisions, each shareholder
reports his proportionate share of the Company's income on his
individual income tax return. Therefore, no provision or liability for
income taxes has been included in the accompanying financial statements.
Comprehensive income:
SFAS No. 130, Reporting Comprehensive Income, establishes requirements for
disclosure of comprehensive income. During the years ended December 31,
2002 and 2001 and the three months ended March 31, 2003 and 2002, the
Company did not have any components of comprehensive income to report.
F-7
MEDICAL BILLING MANAGEMENT, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
YEARS ENDED DECEMBER 31, 2002 AND 2001
THREE MONTHS ENDED MARCH 31, 2003 AND 2002 (UNAUDITED)
2. Significant accounting policies (continued):
Recently issued accounting pronouncements:
In May 2003, the Financial Accounting Standards Board (FASB) issued SFAS
No. 150, Accounting for Certain Financial Instruments with
Characteristics of both Liabilities and Equity. SFAS No. 150 establishes
new standards on how an issuer classifies and measures certain financial
instruments with characteristics of both liabilities and equity. The
provisions of SFAS No. 150 are generally effective for all financial
instruments entered into or modified after May 31, 2003, except for those
provisions relating to mandatorily redeemable non-controlling interests,
which have been deferred. The adoption of SFAS No. 150 did not have a
material impact on the financial position or results operation of the
Company. If the deferred provisions of SFAS No. 150 are finalized in
their current form, management does not expect adoption to have a
material effect on the financial position or results of operation of the
Company.
In January 2003, the Financial Accounting Standards Board ("FASB") issued
SFAS Interpretation No. 46, Consolidation of Variable Interest Entities
("FIN No. 46"), which changes the criteria by which one company includes
another entity in its consolidated financial statements. FIN No. 46
requires a variable interest entity ("VIE") to be consolidated by a
company if that company is subject to a majority of the risk of loss from
the variable interest entity's activities or entitled to receive a
majority of the entity's residual returns or both. In December 2003, the
FASB approved a partial deferral of FIN No. 46 along with various other
amendments. The effective date for this interpretation has been extended
until the first fiscal period ending after December 15, 2004. However,
prior to the required application of this interpretation, a public entity
that is a small business issuer shall apply this interpretation to those
entities that are considered to be special purpose entities no later than
as of the end of the first reporting period after December 15, 2003. As
the Company does not currently have an interest in a VIE, management does
not expect that the adoption of FIN No. 46 will have a significant
immediate impact on the financial condition or results of operations of
the Company.
In November 2002, the FASB issued SFAS Interpretation No. 45 ("FIN No.
45"), Guarantor's Accounting and Disclosure Requirements for Guarantees,
Including Indirect Guarantees and Indebtedness of Others. FIN No. 45
elaborates on the disclosures to be made by the guarantor in its interim
and annual financial statements about its obligations under certain
guarantees that it has issued. It also requires that a guarantor
recognize, at the inception of a guarantee, a liability for the fair
value of the obligation undertaken in issuing the guarantee. The initial
recognition and measurement provisions of this interpretation are
applicable on a prospective basis to guarantees issued or modified after
December 31, 2002, while the provisions of the disclosure requirements
are effective for financial statements of interim or annual reports
ending after December 15, 2002. The Company is currently evaluating the
recognition provisions of FIN No. 45, but does not expect that the
adoption of FIN No. 45 will have a significant immediate impact on the
financial condition or results of operations of the Company, as the
Company has made no guarantees.
F-8
MEDICAL BILLING MANAGEMENT, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
YEARS ENDED DECEMBER 31, 2002 AND 2001
THREE MONTHS ENDED MARCH 31, 2003 AND 2002 (UNAUDITED)
2. Significant accounting policies (continued):
Recently issued accounting pronouncements (continued):
In December 2002, the FASB issued SFAS No. 148, Accounting for Stock-Based
Compensation Transition and Disclosure. This statement amends SFAS No.
123, Accounting for Stock-Based Compensation and establishes two
alternative methods of transition from the intrinsic value method to the
fair value method of accounting for stock-based employee compensation.
In addition, SFAS No. 148 requires prominent disclosure about the effects
on reported net income and requires disclosure for these effects in
interim financial information. The provisions for the alternative
transition methods are effective for fiscal years ending after December
15, 2002 and the amended disclosure requirements are effective for
interim periods beginning after December 15, 2002. As the Company does
not have stock-based compensation, management does not expect that the
adoption of SFAS No. 148 will have a significant immediate impact on the
Company's financial condition or results of operations of the Company.
Use of estimates:
The preparation of financial statements in conformity with accounting
principles generally accepted in the United States of America 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 balance sheet and the reported amounts of
revenues and expenses during the reporting periods. Actual results could
differ from those estimates.
3. Furniture and equipment:
At December 31, 2002 and March 31, 2003 (unaudited), furniture and
equipment consist of the following:
December 31, March 31,
2002 2003
(unaudited)
Office furniture $ 38,359 $ 38,359
Office equipment 15,787 15,787
Computer equipment 79,489 79,489
-------- ---------
133,635 133,635
Less accumulated depreciation 48,723 53,193
-------- ---------
$ 84,912 $ 80,442
======== =========
F-9
MEDICAL BILLING MANAGEMENT, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
YEARS ENDED DECEMBER 31, 2002 AND 2001
THREE MONTHS ENDED MARCH 31, 2003 AND 2002 (UNAUDITED)
4. Commitments:
Operating lease:
The Company leases its office space under the terms of a non-cancelable
lease, expiring July 31, 2006. Rental expense under the lease for the
years ended December 31, 2002 and 2001 was approximately $93,000 and
$76,000, respectively. Rental expense under the lease for the three
months ended March 31, 2003 and 2002 (unaudited) was approximately
$25,000 and $20,000, respectively.
The Company also leases office equipment under operating leases with
various terms through May 2004. Total lease expense for the years ended
December 31, 2002 and 2001 was approximately $4,000 and $6,000,
respectively and $1,000 for both of the three month periods ended March
31, 2003 and 2002 (unaudited).
Minimum future lease payments under operating leases are approximately as
follows:
Year ending:
2003 $93,000
2004 75,000
2005 73,000
2006 42,000
5. Shareholders' equity:
During each of the years ended December 31, 2001 and 2002, the Company made
dividend distributions to its shareholders of $100,000.
6. Subsequent events (unaudited):
Effective May 30, 2003, the Company entered into a sales agreement with
Omni Medical Holdings Inc. ("OMH"), a Nevada corporation based in the
state of South Dakota. Under the terms of the agreement, the Company
sold certain assets (primarily customer list, accounts receivable, and
furniture and equipment) and transferred certain lease obligations to OMH
in exchange for a purchase price of $450,000, of which $150,000 was paid at
closing, $75,000 was payable on November 30, 2003 (paid in February 2004)
and $225,000 is payable on May 31, 2004. The May 31, 2004 payment is
subject to an adjustment which is to be calculated based on a multiple of
the amount by which revenues for the year ending May 31, 2004 are more
or less than a baseline amount.
F-10
(b) Pro Forma Financial Information.
OMNI MEDICAL HOLDINGS, INC.
UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS
Effective May 30, 2003, Omni Medical Holdings, Inc. ("OMH" or "the Company"),
through its wholly-owned subsidiary, Omni Medical Services, Inc., ("OMS"),
completed an asset purchase agreement with Medical Billings Management, Inc.
("MBM"), a corporation based in Mississippi and a provider of medical billing
and collection services to medical practitioners. The aggregate purchase
price of $450,000, including $150,000 paid at closing, $75,000 payable on
November 30, 2003 (paid in February 2004) and $225,000 payment on May 31,
2004. The May 31, 2004 payment is subject to an adjustment which is to be
calculated based on a multiple of the amount by which revenues for the year
ending May 31, 2004 are more or less than a baseline amount. The
adjustment will be recorded as an adjustment to the acquisition cost of MBM.
The accompanying unaudited pro forma consolidated statement of operations for
the year ended March 31, 2003 gives effect to the asset purchase agreement as
if it had been consummated on April 1, 2002. The unaudited pro forma
consolidated statement of operations does not purport to be indicative of the
results of operations that actually would have occurred had the transactions
been consummated on April 1, 2002 or to project the Company's financial
operations to any future period. The accompanying unaudited pro forma
consolidated balance sheet as of March 31, 2003 gives effect to the asset
purchase agreement as if it had been consummated on that date.
The unaudited pro forma consolidated financial statements should be read in
conjunction with the historical financial statements of the Company, as well
as those of Medical Billings Management, Inc.
F-11
OMNI MEDICAL HOLDINGS INC. ("OMH")
PRO FORMA CONSOLIDATED BALANCE SHEET
March 31, 2003
Pro Forma
OMH Adjustments Pro Forma
-------------- ------------ ---------
ASSETS
Current assets:
Cash $ 215,691 $ (150,000)a $ 65,691
Accounts receivable, net 8,820 105,993 a 114,813
---------- ---------- --------
Total current assets 224,511 (44,007) 180,504
Property and equipment, net 143,787 80,442 a 224,229
Goodwill 36,000 36,000
Intangible asset 27,980 244,014 a 271,994
---------- ---------- --------
Total assets $ 432,278 $ 280,449 $712,727
========== ========== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 6,416 $ $ 6,416
Accrued expenses 5,130 5,130
Notes payable, current portion 33,991 280,449 a 314,440
---------- ----------- ----------
Total current liabilities 45,537 280,449 325,986
Note payable, net of current portion 164,122 164,122
---------- ----------- ----------
Total liabilities 209,659 280,449 490,108
---------- ----------- ----------
Shareholders' equity:
Common stock 8,345 8,345
Additional paid-in capital 1,576,043 1,576,043
Deferred compensation expense (41,111) (41,111)
Accumulated deficit (1,320,658) (1,320,658)
----------- ----------- ----------
Total shareholders' equity 222,619 222,619
----------- ----------- ----------
Total liabilities and
shareholders' equity $ 432,278 $ 280,449 $ 712,727
=========== =========== ==========
F-12
OMNI MEDICAL HOLDINGS INC. ("OMH")
PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
Year Ended March 31, 2003
Pro Forma
OMH MBM Adjustments Pro Forma
-------------- -------------- ----------- -----------
Revenues $ 96,462 $1,223,610 $ 1,320,072
Cost of revenues 61,577 899,793 961,370
--------- --------- ---------- -----------
Gross profit 34,885 323,817 358,702
General and
administrative expenses 184,019 384,190 48,803 b 617,012
--------- ---------- ---------- -----------
Loss from operations (149,134) (60,373) (48,803) (258,310)
Other income (expense):
Interest income 32,284 0 32,284
Interest expense (11,879) 0 (19,551)c (31,430)
--------- ---------- ---------- -----------
20,405 0 (19,551) 854
--------- ---------- ---------- -----------
Net loss $(128,729) $ (60,373) $ (68,354) $ (257,456)
========= ========== ========== ===========
F-13
OMNI MEDICAL HOLDINGS, INC.
NOTES TO UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS
1. Description of the transaction:
Effective May 30, 2003, Omni Medical Holdings, Inc. ("OMH"), through its
wholly-owned subsidiary, Omni Medical Services, Inc., ("OMS"), completed an
asset purchase agreement with Medical Billings 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 $450,000 including $150,000 payable at closing, $75,000 payable on
November 30, 2003 (paid in February 2004) and $225,000 payable on May 31,
2004. The May 31, 2004 payable is subject to an adjustment which is to be
calculated based on a multiple of the amount by which revenues for the year
ending May 31, 2004 are greater or less than a baseline amount. The
adjustment, if any, will be recorded as an adjustment to the acquisition cost
of MBM.
2. Description of OMH information:
On May 1, 2003, OMH disposed of a previously wholly-owned subsidiary that was
engaged in a separate line of business. This disposition transaction was
reported in financial statements included in OMH's Form 8-K/A filed March 9,
2004. The financial information presented herein for OMH as of and for the
year ended March 31, 2003 is per the pro forma March 31, 2003 financial
information included in that Form 8-K/A and which reflects the disposition
transaction. Therefore, the attached proforma information reflects the
continuing operations of OMH. Earnings (loss) per share date is not included
in this proforma information as OMH did not become a publicly reporting entity
until September 2003.
3. Description of the pro forma adjustments:
(a) To record OMS' acquisition of MBM for a total purchase price of
$450,000, of which $150,000 was paid in cash and the balance of
$300,000 payable as described in 1, above. The aggregate purchase
price was discounted by $19,551 to impute interest on the $300,000
non-interest bearing debt, resulting in a net purchase price of
$430,449 (and net payable of $280,449). Of this amount, $105,993 was
allocated to accounts receivable, $80,442 was allocated to property and
equipment, and $244,014 was allocated to the acquired customer list.
(b) To record the amortization of the acquired customer list on the
straight line basis over its estimated five year useful life.
(c) To record the imputed interest expense related to the non-interest
bearing payable issued in connection with the purchase.
F-14
(c) Exhibits.
Exhibit
Number Description
------ -----------
10.1 Asset Purchase Agreement
Exhibit A-Accounts Receivable
Exhibit B-Accounts Receivable and Work in
Process
Exhibit C-Employment Agreement
Exhibit D-Security Agreement
Exhibit E-UCC-1 Financing Statement
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the Registrant has duly caused this Current Report to be signed on its
behalf by the undersigned hereunto duly authorized.
OMNI MEDICAL HOLDINGS, INC.
Date: May 7, 2004 By /s/ Arthur D. Lyons
----------- ------------------------
Arthur D. Lyons
Director and President