<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED MARCH 31, 1998
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM TO
COMMISSION FILE NUMBER 0-21343
MEDICAL ALLIANCE, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
TEXAS 73-1347577
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
2445 GATEWAY DRIVE, SUITE 150
IRVING, TEXAS 75063
(Address of principal executive offices)
(Zip Code)
(972) 580-8999
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 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.
Yes X No
--- ---
As of May 8, 1998, there were 6,252,446 shares outstanding of the registrant's
common stock, $0.002 par value.
<PAGE> 2
INDEX
PART I. FINANCIAL INFORMATION
<TABLE>
<CAPTION>
PAGE NO.
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<S> <C> <C>
ITEM 1. FINANCIAL STATEMENTS:
Consolidated Balance Sheets
December 31, 1997 and March 31, 1998 (Unaudited)....................................3
Consolidated Statements of Operations -
Three months ended March 31, 1997 and 1998............................................4
(Unaudited)
Consolidated Statements of Cash Flows
Three months ended March 31, 1997 and 1998 (Unaudited)..............................5
Consolidated Statement of Stockholders Equity.............................................6
Three months ended March 31, 1998 (Unaudited)
Notes to Consolidated Financial Statements (Unaudited)....................................7
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS...................................................8
PART II. OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.........................................................10
Signatures...............................................................................12
</TABLE>
<PAGE> 3
MEDICAL ALLIANCE, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
DECEMBER 31, 1997 AND MARCH 31, 1998
<TABLE>
<CAPTION>
ASSETS
DECEMBER 31, MARCH 31,
1997 1998
---- ----
(UNAUDITED)
<S> <C> <C>
Current assets:
Cash and cash equivalents.................................................... $14,902,578 $15,267,786
Accounts receivable, less allowance for doubtful accounts
of $2,554,705 and $2,006,922 respectively.................................... 2,715,446 2,312,945
Prepaid expenses and other current assets.................................... 1,290,038 1,007,710
Refundable federal and state income taxes.................................... 1,253,910 856,194
----------- -----------
Total current assets................................................... 20,161,972 19,444,635
Property and equipment, net...................................................... 5,473,485 5,401,215
Other assets:
Intangible assets, net of amortization of
$159,346 and $187,007, respectively......................................... 869,080 849,951
----------- -----------
Total assets........................................................... $26,504,537 $25,695,801
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable............................................................. $ 976,150 $ 843,558
Accrued expenses............................................................. 1,197,785 1,016,789
Capital lease obligations.................................................... 248,650 222,110
Deferred revenue............................................................. 163,976 188,546
----------- ------------
Total current liabilities.............................................. 2,586,561 2,271,003
Capital lease obligations, net of current maturities............................. 239,929 185,423
----------- -----------
Total liabilities..................................................... 2,826,490 2,456,426
----------- ------------
Stockholders' equity:
Common stock, $0.002 par value, 30,000,000 shares
authorized; 6,157,300 and 6,282,962 shares issued and
outstanding, respectively,.................................................. 12,331 12,583
Capital in excess of par value................................................... 26,236,053 26,445,804
Retained earnings (accumulated deficit).......................................... (2,504,393) (3,153,068)
Treasury stock at cost, 25,703 shares .......................................... (65,944) (65,944)
------------ -------------
Total stockholders' equity............................................ 23,678,047 23,239,375
----------- ------------
Total liabilities and stockholders' equity............................ $26,504,537 $25,695,801
============ =============
</TABLE>
SEE NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
3
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MEDICAL ALLIANCE, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED MARCH 31, 1997 AND 1998
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31
(UNAUDITED)
1997 1998
----------- ------------
<S> <C> <C>
Net revenue.................................................. $ 4,868,461 $ 4,154,422
----------- -----------
Costs and expenses:
Salaries and benefits...................................... 1,791,112 2,087,612
Selling, general and
administrative.......................................... 1,862,396 1,771,347
Depreciation and
amortization............................................ 636,975 585,021
Provision for uncollectible
accounts................................................ 699,974 536,320
----------- -----------
Total costs and
expenses.............................................. 4,990,457 4,980,300
----------- -----------
Operating income (loss)................................. (121,996) (825,878)
----------- -----------
Other (income) expense:
Interest income and other,
net..................................................... (218,031) ( 196,011)
Interest expense........................................... 29,342 18,808
----------- -----------
Total other (income) expense............................ (188,689) (177,203)
----------- -----------
Income (loss) before income taxes............................ 66,693 (648,675)
Provision for income taxes................................... 28,020 0
----------- -----------
Net income (loss)............................................ $ 38,673 $ (648,675)
=========== ===========
Net income (loss) per share (basic).......................... $ .01 $ (.10)
=========== ===========
Net income (loss) per share (diluted)........................ $ .01 $ (.10)
=========== ===========
Weighted average number of common shares and common share equivalents
(in thousands) (basic)...................................... 5,977 6,251
Weighted average number of common shares and common share equivalents
(in thousands) (diluted).................................... 6,289 6,404
</TABLE>
SEE NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
4
<PAGE> 5
MEDICAL ALLIANCE, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31,
(UNAUDITED)
1997 1998
----------- ------------
<S> <C> <C>
Cash flows from operating activities:
Net income (loss).................................................................. $ 38,673 $ (648,675)
Adjustments to reconcile net income (loss) to net cash (used in) provided by
operating activities:
Loss on joint venture........................................................... 7,263 -0-
Provision for uncollectible accounts............................................ 699,974 536,320
Depreciation and amortization................................................... 636,975 585,021
Deferred income taxes........................................................... 28,020 -0-
Changes in assets and liabilities net of effects from
acquisitions:
Accounts receivable............................................................. (826,249) (133,819)
Prepaid expenses and other current assets....................................... (112,507) 680,044
Accounts payable and accrued expenses........................................... (1,790,638) (313,588)
Deferred revenue................................................................ 13,762 24,570
----------- -----------
Net cash (used in) provided by operating activities............................. (1,304,727) 729,873
Cash flows from investing activities:
Capital expenditures............................................................ (1,635,430) (485,090)
Payment for acquisitions........................................................ (465,978) -0-
Other........................................................................... 16,000 (8,532)
----------- -----------
Net cash used in investing activities........................................... (2,085,408) (493,622)
----------- -----------
Cash flow from financing activities:
Repayment of capital lease obligations.......................................... (114,473) (81,046)
Proceeds from issuance of common stock.......................................... 41,228 210,003
----------- -----------
Net cash (used in) provided by financing activities............................. (73,245) 128,957
----------- -----------
Net (decrease) increase in cash and cash equivalents................................. (3,463,380) 365,208
Cash and cash equivalents at beginning of period..................................... 20,505,787 14,902,578
----------- -----------
Cash and cash equivalents at end of period........................................... $17,042,407 $15,267,786
=========== ===========
Supplemental schedule of noncash investing and financing
activities:
Capital lease obligations incurred................................................. 577,627 -0-
The Company has acquired businesses, as follows:
Fair value of assets acquired...................................................... 828,249 -0-
Goodwill recorded.................................................................. 675,195 -0-
Less:
Cash paid....................................................................... (465,978) -0-
Fair value of common stock...................................................... (255,000) -0-
------------ -----------
Liabilities assumed.............................................................. 782,466 -0-
=========== ===========
</TABLE>
SEE NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
5
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MEDICAL ALLIANCE, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
FOR THE THREE MONTHS ENDED MARCH 31, 1998
<TABLE>
<CAPTION>
RETAINED
COMMON STOCK EARNINGS TOTAL
----------------------- CAPITAL IN EXCESS (ACCUMULATED TREASURY STOCKHOLDERS'
SHARES AMOUNT OF PAR VALUE DEFICIT) STOCK EQUITY
--------- -------- ------------ ----------- -------- -----------
<S> <C> <C> <C> <C> <C> <C>
Balance at December 31, 1997......... 6,157,300 $12,331 $26,236,053 $(2,504,393) $(65,944) $23,678,047
Options exercised (unaudited)...... 125,662 252 209,751 210,003
Net loss (unaudited)............... (648,675) (648,675)
--------- ------- ----------- ----------- -------- -----------
Balance at March 31, 1998
(unaudited).......................... 6,282,962 $12,583 $26,445,804 $(3,153,068) $(65,944) $23,239,375
========= ======= =========== ============ ======== ===========
</TABLE>
SEE NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
6
<PAGE> 7
MEDICAL ALLIANCE, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(INFORMATION OF AND FOR THE THREE MONTH PERIOD ENDED
MARCH 31, 1997 AND 1998 IS UNAUDITED)
1. UNAUDITED INTERIM FINANCIAL INFORMATION
The consolidated balance sheet as of March 31, 1998, and the consolidated
statements of operations for the three months ended March 31, 1997 and 1998, and
the consolidated statements of cash flows for the three months ended March 31,
1997 and 1998, and the consolidated statement of stockholders' equity for the
three months ended March 31, 1998, have been prepared by the Company without
audit. The December 31, 1997 consolidated, condensed balance sheet is derived
from the audited consolidated balance sheet as of that date. In the opinion of
management, all adjustments (which include only normal, recurring adjustments)
necessary to present fairly the financial position at March 31, 1998, and the
results of operations and cash flows for all periods presented have been made.
The results of operations for the interim periods are not necessarily indicative
of the operating results for the full year.
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amount of assets, particularly accounts
receivable, 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 may, in some instances,
differ from previously estimated amounts.
Certain information and footnote disclosures normally included in financial
statements prepared in accordance with generally accepted accounting principles
have been condensed or omitted pursuant to the rules and regulations of the
Securities and Exchange Commission. Accordingly, these financial statements
should be read in conjunction with the audited financial statements and related
notes of the Company for the fiscal year ended December 31, 1997 included in the
Company's Form 10-K.
2. RECENT ACCOUNTING PRONOUNCEMENTS
As of January 1, 1998, the Company adopted Statement of Financial Accounting
Standards No. 130 (SFAS 130), "Reporting Comprehensive Income". SFAS 130
establishes new rules for the reporting and presentation of comprehensive income
and its components, however, the adoption of this statement had no impact on the
Company's net income or stockholders' equity as presented.
3. PROPERTY AND EQUIPMENT
Property and equipment consisted of the following:
<TABLE>
<CAPTION>
(UNAUDITED)
DECEMBER 31, MARCH 31,
1997 1998
---- ----
<S> <C> <C>
Medical equipment................................................. $8,231,052 $8,679,125
Furniture and fixtures............................................ 1,763,602 1,800,219
Transportation.................................................... 117,778 117,778
Leasehold improvements............................................ 52,961 53,361
Equipment under capital leases.................................... 1,493,533 1,493,533
--------- ---------
11,658,926 12,144,016
Less accumulated depreciation and amortization.................... (6,185,441) (6,742,801)
----------- ----------
Net property and equipment........................................ $5,473,485 $5,401,215
========== ==========
</TABLE>
7
<PAGE> 8
Depreciation expense related to property and equipment was approximately
630,000 and $557,000 for the three months ended March 31, 1997 and 1998,
respectively. Accumulated amortization related to equipment under capital
leases was approximately $1,028,000 and $1,084,000 at December 31, 1997 and
March 31, 1998, respectively.
Property and equipment are recorded at cost. Depreciation is provided by the
straight-line method over existing useful lives from three to five years.
Effective January 1, 1998, the Company extended the estimated useful lives on
certain medical equipment and established residual values on such equipment
based on historical experience. The change in accounting estimate had the
effect of reducing depreciation expense and decreasing the net loss by
approximately $256,000 ($.04 per share) for the three months ended March 31,
1998.
4. EARNINGS PER SHARE
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31, MARCH 31,
1997 1998
---- ----
Basic:
<S> <C> <C>
Weighted average number of common shares outstanding (basic) 5,977,405 6,250,964
Net income (loss).............................................. $ 38,673 $ (648,675)
Net income (loss) per share (basic)............................ $ .01 $ (.10)
========== ==========
Diluted:
Weighted average number of common shares outstanding (basic) 5,977,405 6,250,964
Incremental common shares outstanding applicable to
"In the Money" options and warrants based on the
estimated year or quarter end fair market value of the stock.. 311,148 153,281
Weighted average number of common shares outstanding (diluted) 6,288,553 6,404,245
Net income (loss).............................................. $ 38,673 $ (648,675)
Net income (loss) per share (diluted).......................... $ .01 $ (.10)
========== ==========
</TABLE>
5. SUBSEQUENT EVENT
On May 14, 1998, the Company commenced a share repurchase program of up to
one million shares of the Company's Common Stock. The purchases are to be made
from time to time over the next 12 months at prices then prevailing on the
Nasdaq National Market System or in privately negotiated transactions.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
THREE MONTHS ENDED MARCH 31, 1998 AND 1997
NET REVENUES. Net revenues decreased from $4.9 million for the three months
ended March 31, 1997, to $4.2 million for the three months ended March 31, 1998,
a decrease of $700,000 or 14%. This decrease was attributable in part to a
decrease in revenues related to Company sponsored seminars, which decreased from
$348,000 for the three months ended March 31, 1997 to $40,000 for the three
months ended March 31, 1998, a decrease of $308,000. During the three months
ended March 31, 1997, the Company derived seminar revenues related to the hair
removal product line which was discontinued in the fourth quarter of 1997.
Further, the decrease was attributable to a decline in total procedure volume,
which decreased from 20,986 for the three months ended March 31, 1997, to 19,451
for the three months ended March 31, 1998, a decrease of 1,535 or 7%. Medical
surgical procedures decreased from 6,507 for the three months ended March 31,
1997, to 6,331 for the three months ended March 31, 1998, a decrease of 176 or
3%, which contributed to 11% of the total decrease in procedure volume.
Aesthetic elective procedures decreased from 14,479 for the three months ended
March 31, 1997, to 13,120 for the three months ended March 31, 1998, a decrease
of 1,359 or 9%, which contributed to 89% of the total decrease in procedure
volume.
The average net revenue per case decreased from $232 for the three months
ended March 31, 1997, to $214 for the three months ended March 31, 1998, a
decrease of $18 or 8%. This decrease was attributable to a change in case mix
with aesthetic elective procedures, which had a lower average net revenue per
case of $192, compared to $251 for the medical surgical procedures, increasing
from 54% of total net patient service revenues for the three months ended March
31, 1997 to 61% of total net patient service revenues for the three months ended
March 31, 1998.
SALARIES AND BENEFITS EXPENSE. Salaries and benefits expense increased from
$1.8 million for the three months ended March 31, 1997, to $2.1 million for the
three months ended March 31,1998, an increase of $300,000 or 17%. Average total
employees for the Company
8
<PAGE> 9
increased from 149 for the three months ended March 31, 1997, to 167 for the
three months ended March 31, 1998, an increase of 18 or 12%. Furthermore, there
was approximately $60,000 paid in severance packages during the first quarter of
1998 related to a reduction in corporate personnel. Salaries and benefits
expense as a percentage of net revenues increased from 36.8% for the three
months ended March 31, 1997, to 50.3% for the three months ended March 31, 1998.
SELLING, GENERAL AND ADMINISTRATIVE EXPENSE. Selling, general and
administrative expense decreased from $1.9 million for the three months ended
March 31, 1997, to $1.8 million for the three months ended March 31, 1998, a
decrease of $100,000 or 5%. Selling, general and administrative expense as a
percentage of net revenues increased from 38.3% for the three months ended March
31, 1997, to 42.6% for the three months ended March 31, 1998.
DEPRECIATION AND AMORTIZATION. Depreciation and amortization decreased from
$637,000 for the three months ended March 31, 1997, to $585,000 for the three
months ended March 31, 1998, a decrease of $52,000 or 8%. This decrease was due
mainly to a change in useful lives on certain medical equipment from three to
five years as well as the establishment of residual values on such equipment.
The change in useful lives had the effect of reducing depreciation expense and
decreasing the net loss by approximately $256,000 ($.04 per share) for the
three months ended March 31, 1998. This decrease was offset by the addition of
$3.3 million in medical equipment during the twelve months ended December 31,
1997.
PROVISION FOR UNCOLLECTIBLE ACCOUNTS. Provision for uncollectible accounts
decreased from $700,000 for the three months ended March 31, 1997, to $536,000
for the three months ended March 31, 1998, a decrease of $164,000 or 23%. As a
percentage of net revenue, provision for uncollectible accounts decreased from
14.4% to 12.9% which is primarily attributable to the Company's new processes
including scheduling, preregistration, and preverification.
OPERATING LOSS. Operating loss increased from $122,000 for the three months
ended March 31, 1997 to $826,000 for the three months ended March 31, 1998, an
increase of $704,000 or 577%. As a percentage of net revenues, operating loss
increased from 2.5% for the three months ended March 31, 1997, to 19.9% for the
three months ended March 31, 1998. This increase was primarily due to the
decrease in net revenues.
NET INCOME (LOSS). As a result of the items discussed above, the Company's
net income decreased from $39,000 for the three months ended March 31, 1997, to
a loss of $649,000 for the three months ended March 31, 1998, a decrease of
$688,000.
LIQUIDITY AND CAPITAL RESOURCES
From its inception through 1993, the Company's operating expenses
significantly exceeded its net revenues, resulting in an accumulated retained
deficit of approximately $1.3 million as of December 31, 1993. From 1994 until
March 31, 1997, the Company recorded positive earnings, which resulted in
retained earnings of $431,290 as of March 31, 1997. As of March 31, 1998, the
Company has an accumulated retained deficit of $3.2 million, due to losses
incurred during the twelve months ended December 31, 1997 and the three months
ended March 31, 1998. Until October 1996, the Company funded its operations
primarily through the private placement of equity securities, bank borrowings
and cash provided by operations. Prior to its initial public offering, which was
completed on October 11, 1996, the majority of the capital raised by the Company
had been raised from the private placement of $2.2 million of equity securities,
including $750,000 raised in July 1992, and approximately $1.5 million raised in
November 1995. The Company obtained a $2.0 million credit facility from
NationsBank of Texas, N.A. ("NationsBank") in June 1995. This facility was
composed of several tranches bearing interest rates ranging from prime plus 0.5%
to prime plus 1.5%. The net proceeds from such facility were used to retire
outstanding debt and to purchase medical equipment. The Company's facility with
NationsBank was increased to $4.3 million in March 1996. The NationsBank debt
was paid off in full during October 1996 with a portion of the net proceeds from
the initial public offering.
Net cash (used in) provided by the operating activities was $(1.3 million)
and $730,000 for the three months ended March 31, 1997 and 1998, respectively.
For its investing activities, the Company consumed $2.1 million and $494,000 for
the three months ended March 31, 1997 and 1998, respectively, primarily for the
purchase of medical equipment and payment for acquisitions. Capital expenditures
were $1.6 million and $485,000 for the three months ended March 31, 1997 and
1998, respectively. Net cash (used in) provided by financing activities was
$(73,000) and $129,000 for the three months ended March 31, 1997 and 1998,
respectively.
YEAR 2000 COMPLIANCE
The Company has and will continue to make certain investments in its
information systems and applications to ensure the Company is year 2000
compliant. The financial impact to the Company has not been and is not
anticipated to be material to its financial position or results of operations in
any given year.
9
<PAGE> 10
PART II
ITEM 1. LEGAL PROCEEDINGS.
As of the date hereof, there are no legal proceedings pending against or
involving the Company that in the opinion of management, could have a material
adverse effect on the business, financial condition or results of operations of
the Company.
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS
The Company commenced its IPO on October 11, 1996 pursuant to a
Registration Statement on Form S-1 (file number 333-9815) which was declared
effective by the Securities and Exchange Commission on October 9, 1996. The
Company sold an aggregate of 2,300,000 shares of Common Stock in the IPO at an
initial price to the public of $11.00 per share. The IPO has terminated and all
shares have been sold. The managing underwriters of the IPO were Bear, Stearns
& Co., Inc. and Equitable Securities Corporation. Aggregate proceeds from the
IPO were $25,300,000, which includes $3,300,000 in aggregate proceeds due to
the exercise of the underwriters' option to purchase shares to cover
over-allotments. The Company paid underwriters' discounts and commissions of
$1,771,000 and other expenses of approximately $490,000 in connection with the
IPO. Net proceeds to the Company in the IPO were $23,039,000.
From October 9, 1996, the effective date of the Registration Statement, to
March 31, 1998, the ending date of the reporting period, the approximate amount
of net offering proceeds used were $9.1 million, which were used as follows:
$3.5 million used to pay off in full the NationsBank debt, $5 million used to
purchase medical equipment and $600,000 to acquire other companies.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES.
None.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
None.
ITEM 5. SHARE REPURCHASE PROGRAM
On May 14, 1998, the Company commenced a share repurchase program of up
to one million shares of the Company's Common Stock. The purchases are to be
made from time to time over the next 12 months at prices then prevailing on the
Nasdaq National Market System or in privately negotiated transactions.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
<TABLE>
<CAPTION>
EXHIBIT
NUMBER EXHIBIT DESCRIPTION
- ------ -------------------
<S> <C>
2.1 Asset Purchase Agreement, dated March 18, 1996, between the Company and
Maasai Inc. (1)(6)
2.2 Asset Purchase Agreement, dated June 10, 1996, between the Company and
Mobile Laser Services, Inc. (1)(6)
2.3 Asset Purchase Agreement, dated as of January 21, 1997 among Stone
Treatment Center of New England, Inc., Gregory A. Mercurio, Vincent A.
Catallozzi, M.D., Alexander Calenda, M.D., Gerald Marsocci, M.D. Joseph
C. Cambio, M.D. and the Company. (3)(6)
3.1 Amended and Restated Articles of Incorporation of the Company. (1)
3.2 Amended and Restated Bylaws of the Company. (1)
4.1 Specimen of Company Common Stock Certificate. (1)
4.2 Warrant to Purchase 23,416 Shares of Common Stock of the Company dated
August 15, 1993 between the Company and Columbia General Corporation.
(1)
4.3 Warrant to Purchase 2,810 Shares of Common Stock of the Company dated
October 17, 1993 between the Company and Robert J. Mathews, M.D. (1)
4.4 Warrant to Purchase 2,342 Shares of Common Stock of the Company dated
May 31, 1994 between the Company and Shelly Burks. (1)
4.5 Warrant to Purchase 1,873 Shares of Common Stock of the Company dated
May 31, 1994 between the Company and Thomas A. Montgomery. (1)
4.6 Warrant to Purchase 6,556 Shares of Common Stock of the Company dated
September 1, 1994 between the Company and Thomas A. Montgomery. (1)
4.7 Warrant to Purchase 15,651 Shares of Common Stock of the Company dated
July 27, 1995 between the Company and Paul R. Herchman. (1)
10.1 Agreement between the Company and Coherent Medical Group. (1)
10.2 Master Lease agreement dated July 20, 1995 between the Company and
Cabot Medical Corporation. (1)
10.3 Master Service Agreement dated June 3, 1996 between the Company and
Cosmetic Technologies International. (2)
</TABLE>
10
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<TABLE>
<S> <C>
10.4 Joint Venture Agreement dated March 25, 1996 between the Company and
Coherent-AMT Inc. (2)
10.5 Medical Alliance, Inc. 1994 Amended and Restated Long-Term Incentive
Plan. (2)
10.6 Employment Agreement between the Company and Paul Herchman. (1)
10.7 Employment Agreement between the Company and Gary Hill. (4)
10.8 Employment Agreement between the Company and Kevin O'Brien. (1)
10.9 Employment Agreement between the Company and Michael G. Wallace. (1)
10.10 Lease Agreement between the Company and Graymont Partners. Ltd. (1)
10.11 Strategic Alliance Agreement, dated as of December 19, 1996, by and
between Laserscope and the Company. (3)
10.12 Exclusive Provider Agreement, dated as of January 21, 1997, by and
between Thermolase Corporation and the Company. (3)
10.13 Strategic Alliance Agreement, dated as of January 1, 1997, by and
between Valleylab, Inc. and the Company. (3)
10.14 Exclusive Provider Agreement, dated as of February 9, 1997, by and
between Imagyn Medical, Inc. and the Company. (3)
12.1 Subsidiaries of the Company. (1)
27.1 Financial Data Schedule(5)
- --------
</TABLE>
(1) Previously filed as an exhibit to the Company's Registration Statement on
Form S-1 (No. 333-09815) and incorporated herein by reference.
(2) Previously filed as an exhibit to the Company's Registration Statement on
Form S-8 (No. 333-18545) and incorporated herein by reference.
(3) Previously filed as an exhibit to the Company's Annual Report on Form 10-K
for the fiscal year ended December 31, 1996, and incorporated herein by
reference.
(4) Previously filed as an exhibit to the Company's Annual Report on Form 10-K
for the fiscal year ended December 31, 1997.
(5) Filed herewith.
(6) Schedules and similar attachments to this Exhibit have not been filed
herewith. The Company agrees to furnish a copy of any such omitted
schedules and attachments to the Commission upon request.
(b) Reports on Form 8-K
None.
11
<PAGE> 12
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Medical Alliance, Inc.
DATE: May 15, 1998
Signature TITLE
/s/ PAUL R. HERCHMAN
---------------------------------- President and
Paul R. Herchman Chief Executive Officer
/s/ MARK NOVY
---------------------------------- Vice President of Finance
Mark Novy and Controller
12
<PAGE> 13
<TABLE>
<CAPTION>
EXHIBIT INDEX
EXHIBIT
NUMBER EXHIBIT DESCRIPTION
- ------ -------------------
<S> <C>
2.1 Asset Purchase Agreement, dated March 18, 1996, between the Company and
Maasai Inc. (1)(6)
2.2 Asset Purchase Agreement, dated June 10, 1996, between the Company and
Mobile Laser Services, Inc. (1)(6)
2.3 Asset Purchase Agreement, dated as of January 21, 1997 among Stone
Treatment Center of New England, Inc., Gregory A. Mercurio, Vincent A.
Catallozzi, M.D., Alexander Calenda, M.D., Gerald Marsocci, M.D. Joseph
C. Cambio, M.D. and the Company. (3)(6)
3.1 Amended and Restated Articles of Incorporation of the Company. (1)
3.2 Amended and Restated Bylaws of the Company. (1)
4.1 Specimen of Company Common Stock Certificate. (1)
4.2 Warrant to Purchase 23,416 Shares of Common Stock of the Company dated
August 15, 1993 between the Company and Columbia General Corporation.
(1)
4.3 Warrant to Purchase 2,810 Shares of Common Stock of the Company dated
October 17, 1993 between the Company and Robert J. Mathews, M.D. (1)
4.4 Warrant to Purchase 2,342 Shares of Common Stock of the Company dated
May 31, 1994 between the Company and Shelly Burks. (1)
4.5 Warrant to Purchase 1,873 Shares of Common Stock of the Company dated
May 31, 1994 between the Company and Thomas A. Montgomery. (1)
4.6 Warrant to Purchase 6,556 Shares of Common Stock of the Company dated
September 1, 1994 between the Company and Thomas A. Montgomery. (1)
4.7 Warrant to Purchase 15,651 Shares of Common Stock of the Company dated
July 27, 1995 between the Company and Paul R. Herchman. (1)
10.1 Agreement between the Company and Coherent Medical Group. (1)
10.2 Master Lease agreement dated July 20, 1995 between the Company and
Cabot Medical Corporation. (1)
10.3 Master Service Agreement dated June 3, 1996 between the Company and
Cosmetic Technologies International. (2)
</TABLE>
<PAGE> 14
<TABLE>
<S> <C>
10.4 Joint Venture Agreement dated March 25, 1996 between the Company and
Coherent-AMT Inc. (2)
10.5 Medical Alliance, Inc. 1994 Amended and Restated Long-Term Incentive
Plan. (2)
10.6 Employment Agreement between the Company and Paul Herchman. (1)
10.7 Employment Agreement between the Company and Gary Hill. (4)
10.8 Employment Agreement between the Company and Kevin O'Brien. (1)
10.9 Employment Agreement between the Company and Michael G. Wallace. (1)
10.10 Lease Agreement between the Company and Graymont Partners. Ltd. (1)
10.11 Strategic Alliance Agreement, dated as of December 19, 1996, by and
between Laserscope and the Company. (3)
10.12 Exclusive Provider Agreement, dated as of January 21, 1997, by and
between Thermolase Corporation and the Company. (3)
10.13 Strategic Alliance Agreement, dated as of January 1, 1997, by and
between Valleylab, Inc. and the Company. (3)
10.14 Exclusive Provider Agreement, dated as of February 9, 1997, by and
between Imagyn Medical, Inc. and the Company. (3)
12.1 Subsidiaries of the Company. (1)
27.1 Financial Data Schedule(5)
- --------
</TABLE>
(1) Previously filed as an exhibit to the Company's Registration Statement on
Form S-1 (No. 333-09815) and incorporated herein by reference.
(2) Previously filed as an exhibit to the Company's Registration Statement on
Form S-8 (No. 333-18545) and incorporated herein by reference.
(3) Previously filed as an exhibit to the Company's Annual Report on Form 10-K
for the fiscal year ended December 31, 1996, and incorporated herein by
reference.
(4) Previously filed as an exhibit to the Company's Annual Report on Form 10-K
for the fiscal year ended December 31, 1997.
(5) Filed herewith.
(6) Schedules and similar attachments to this Exhibit have not been filed
herewith. The Company agrees to furnish a copy of any such omitted
schedules and attachments to the Commission upon request.
(b) Reports on Form 8-K
None.
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C> <C>
<PERIOD-TYPE> YEAR 3-MOS
<FISCAL-YEAR-END> DEC-31-1997 MAR-31-1998
<PERIOD-START> JAN-01-1997 JAN-01-1998
<PERIOD-END> DEC-31-1997 MAR-31-1998
<CASH> 14,902,578 15,267,786
<SECURITIES> 0 0
<RECEIVABLES> 5,270,151 4,319,867
<ALLOWANCES> 2,554,705 2,006,922
<INVENTORY> 0 0
<CURRENT-ASSETS> 20,161,972 19,444,635
<PP&E> 11,658,926 12,144,016
<DEPRECIATION> 6,185,441 6,742,801
<TOTAL-ASSETS> 26,504,537 25,695,801
<CURRENT-LIABILITIES> 2,586,561 2,271,003
<BONDS> 488,579 407,533
0 0
0 0
<COMMON> 12,331 12,583
<OTHER-SE> 23,665,716 23,226,792
<TOTAL-LIABILITY-AND-EQUITY> 26,504,537 25,695,801
<SALES> 0 0
<TOTAL-REVENUES> 18,821,125 4,154,422
<CGS> 0 0
<TOTAL-COSTS> 0 0
<OTHER-EXPENSES> 0 0
<LOSS-PROVISION> 3,870,925 536,320
<INTEREST-EXPENSE> 111,578 18,808
<INCOME-PRETAX> (3,745,277) (648,675)
<INCOME-TAX> (848,267) 0
<INCOME-CONTINUING> (2,897,010) (648,675)
<DISCONTINUED> 0 0
<EXTRAORDINARY> 0 0
<CHANGES> 0 0
<NET-INCOME> (2,897,010) (648,675)
<EPS-PRIMARY> (.48) (.10)
<EPS-DILUTED> (.48) (.10)
</TABLE>
