<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
FOR ANNUAL AND TRANSITION REPORTS
PURSUANT TO SECTIONS 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 [FEE REQUIRED]
For the fiscal year ended December 31, 1996
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 [NO FEE REQUIRED]
For the transition period from __________ to _________
Commission file number 333-15595-02
THE CORVALLIS CLINIC, P.C.
formerly PHYSICIAN PARTNERS CORVALLIS, P.C.
(Exact Name of Registrant as Specified in Its Charter)
Oregon 93-1221257
State or other jurisdiction of (I.R.S. Employer
incorporation or organization Identification No.)
Address of Principal Executive Offices
Registrant's telephone number, including area code
444 N.W. Elks Drive
Corvallis, Oregon 97330
(541) 754-1374
Securities registered pursuant to Section 12(b) of the Act:
Title of Each Class Name of Each Exchange on Which Registered
Securities registered pursuant to Section 12(g) of the Act:
(Title of Class)
<PAGE> 2
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 [ ] No [X]
Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be contained,
to the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10 K or any
amendment to this Form 10 K. [x]
State the aggregate market value of the voting stock held by
non-affiliates of the registrant. The aggregate market value shall be 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 60 days prior to the
date of filing. (See definition of affiliate in Rule 405.)
The Registrant's shares have no market value.
Note. If a determination as to whether a particular person or
entity is an affiliate cannot be made without involving unreasonable
effort and expense, the aggregate market value of the common stock held
by non-affiliates may be calculated on the basis of assumptions
reasonable under the circumstances, provided that the assumptions are
set forth in this form.
APPLICABLE ONLY TO REGISTRANTS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS:
Indicate by check mark whether the registrant has filed all documents and
reports required to be filed by Section 12, 13 or 15(d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities under a plan
confirmed by a court.
Yes [ ] No [ ]
(APPLICABLE ONLY TO CORPORATE REGISTRANTS)
Indicate the number of shares outstanding of each of the registrant's classes of
common stock, as of the latest practicable date.
70 shares of Common Stock were outstanding as of April 3, 1997
DOCUMENTS INCORPORATED BY REFERENCE.
List hereunder the following documents if incorporated by reference and the Part
of the Form 10-K (e.g., Part I, Part II, etc.) into which the document is
incorporated: (1) any annual report to security holders; (2) any proxy or
information statement; and (3) any prospectus filed pursuant to Rule 424(b) or
(c) under the Securities Act of 1933. The listed documents should be clearly
described for identification purposes (e.g., annual report to security holders
for fiscal year ended December 24, 1980).
This report contains only financial statements for fiscal 1996,
pursuant to Rule 15d-2 under the Securities Exchange Act of 1934, as amended.
<PAGE> 3
CORVALLIS CLINIC, P.C.
(FORMERLY PHYSICIAN PARTNERS CORVALLIS, P.C.)
INDEX TO FINANCIAL STATEMENTS
1. THE CORVALLIS CLINIC, P.C.
(FORMERLY PHYSICIAN PARTNERS CORVALLIS, P.C.)
Report of Independent Accountants
Balance Sheet as of December 31, 1996
Notes to Financial Statements
2. THE CORVALLIS CLINIC, P.C.
Report of Independent Public Accountants
Balance Sheets as of December 31, 1996 and November 30, 1995
Statements of Operations for the thirteen months ended December 31, 1996 and the
years ended November 30, 1995 and 1994
Statements of Cash Flows for the thirteen months ended December 31, 1996 and the
years ended November 30, 1995 and 1994
Statements of Accumulated Deficit for the thirteen months ended December 31,
1996 and the years ended November 30, 1995 and 1994
Notes to Financial Statements
<PAGE> 4
THE CORVALLIS CLINIC, PC
(FORMERLY PHYSICIAN PARTNERS CORVALLIS, PC)
FINANCIAL STATEMENTS
AS OF DECEMBER 31, 1996
TOGETHER WITH AUDITORS' REPORT
<PAGE> 5
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Board of Directors of
The Corvallis Clinic, PC:
We have audited the accompanying balance sheet of The Corvallis Clinic, PC,
formerly Physician Partners Corvallis, PC (an Oregon corporation) as of December
31, 1996. This financial statement is the responsibility of the Company's
management. Our responsibility is to express an opinion on this financial
statement based on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
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 audit provides a reasonable basis for our opinion.
In our opinion, the financial statement referred to above presents fairly, in
all material respects, the financial position of The Corvallis Clinic, PC as of
December 31, 1996 in conformity with generally accepted accounting principles.
ARTHUR ANDERSEN LLP
Portland, Oregon,
April 3, 1997
<PAGE> 6
THE CORVALLIS CLINIC, PC
(FORMERLY PHYSICIAN PARTNERS CORVALLIS, PC)
BALANCE SHEET AS OF DECEMBER 31, 1996
ASSETS
CASH $ 1
----
Total assets $ 1
====
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES $ -
STOCKHOLDERS' EQUITY:
Common stock voting; no par value; 500 shares authorized; 64 shares issued
and outstanding
1
----
Total liabilities and stockholders' equity $ 1
====
The accompanying notes are an integral part of this statement.
<PAGE> 7
THE CORVALLIS CLINIC, PC
(FORMERLY PHYSICIAN PARTNERS CORVALLIS, PC)
NOTES TO FINANCIAL STATEMENT
1. BUSINESS AND ORGANIZATION:
The Corvallis Clinic, PC (Corvallis), an Oregon professional corporation, was
incorporated on September 18, 1996 under the name Physician Partners Corvallis,
PC for the purpose of effecting a reorganization transaction between Physician
Partners, Inc. (PPI) and three Oregon professional corporations (the Founding
Clinics).
This transaction, which was consummated on February 1, 1997, resulted in a
separation of operations of the three Founding Clinics between medical
professional services activities (i.e., providers of medical services) and the
physician practice management activities of the business. The professional
services activities were spun off into newly formed professional corporations
(New PCs). Corvallis is one of the New PCs. The physician practice management
business, along with substantially all of the assets and liabilities of the
three Founding Clinics, i.e., cash, receivables, inventories, prepaids,
property, plant and equipment, other assets, payables, accruals, debt, and
certain contractual commitments were transferred to PPI. The New PCs are
responsible for providing medical services and the related costs for provider
compensation and benefits. The assets transferred to the New PCs, which had zero
carrying value, include the employment agreements between each Company and its
providers, certain provider contracts under which the New PCs will be receiving
fee-for-service compensation and patient medical records.
An integral part of the reorganization is a 40-year management agreement whereby
PPI provides physician practice management services to the New PCs. Services to
be provided include management and administrative services, capital resources,
facilities, equipment and supplies. As consideration, PPI is entitled to (a)
reimbursement of all managerial costs and expenses (Manager's Expenses) incurred
by PPI and (b) a management fee equal to 16% of (i) net revenues relating to
services provided by the New PCs less (ii) Manager's Expenses.
Essentially all of the cash remaining in the New PC after the payments to PPI
under the management agreement will fund the compensation and benefits of
providers employed by the New PCs.
2. STATEMENTS OF OPERATIONS AND CASH FLOWS:
No statements of operations and cash flows have been presented as PPC did not
commence operations until February 1, 1997 and, accordingly, there has been no
operating or cash activities.
<PAGE> 8
THE CORVALLIS CLINIC, P.C.
FINANCIAL STATEMENTS
AS OF DECEMBER 31, 1996 AND NOVEMBER 30, 1995
TOGETHER WITH AUDITORS' REPORT
<PAGE> 9
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Board of Directors of
The Corvallis Clinic, P.C.:
We have audited the accompanying balance sheets of The Corvallis Clinic, P.C.
(an Oregon professional corporation) as of December 31, 1996 and November 30,
1995, and the related statements of operations, accumulated deficit and cash
flows for the thirteen-month period ended December 31, 1996, and each of the
years in the two-year period ended November 30, 1995. These financial statements
are the responsibility of Corvallis' management. Our responsibility is to
express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. 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 The Corvallis Clinic, P.C. as
of December 31, 1996 and November 30, 1995, and the results of its operations
and its cash flows for the thirteen-month period ended December 31, 1996, and
each of the years in the two-year period ended November 30, 1995 in conformity
with generally accepted accounting principles.
ARTHUR ANDERSEN LLP
Portland, Oregon,
March 5, 1997
<PAGE> 10
THE CORVALLIS CLINIC, P.C.
BALANCE SHEETS - AS OF DECEMBER 31, 1996 AND NOVEMBER 30, 1995
ASSETS
<TABLE>
<CAPTION>
1996 1995
----------- -----------
CURRENT ASSETS:
<S> <C> <C>
Cash and cash equivalents $ 186,572 $ 176,812
Patient accounts receivable, net of allowances for
contractual discounts and uncollectible accounts of
$2,544,000 and $1,992,000 at December 31, 1996 and
November 30, 1995, respectively 4,232,274 4,303,960
Healthcare and other receivables 2,089,043 1,179,380
Inventories of drugs and supplies 219,245 224,065
Prepaid expenses and deposits 196,134 479,264
----------- -----------
Total current assets 6,923,268 6,363,481
----------- -----------
PROPERTY, PLANT AND EQUIPMENT, net of accumulated depreciation and amortization
of $9,220,560 and $7,533,789 at December 31, 1996 and November 30, 1995,
respectively 18,913,428 19,533,621
----------- -----------
OTHER ASSETS:
Investments in affiliates 654,225 561,668
Other - 89,882
----------- -----------
654,225 651,550
----------- -----------
Total assets $26,490,921 $26,548,652
=========== ===========
LIABILITIES, REDEEMABLE STOCK AND ACCUMULATED DEFICIT
CURRENT LIABILITIES:
Current portion of long-term debt and capital and direct
financing lease obligations $ 898,941 $ 531,934
Line of credit 3,330,000 1,409,000
Accounts payable and accrued expenses 1,747,593 2,055,262
Income taxes payable - 32,215
Accrued healthcare costs 3,057,806 1,280,367
Accrued compensation and related expenses 1,114,538 1,909,124
Deferred revenue 338,800 396,747
----------- -----------
Total current liabilities 10,487,678 7,614,649
----------- -----------
LONG-TERM DEBT, net of current portion 1,387,713 729,453
CAPITAL AND DIRECT FINANCING LEASE OBLIGATIONS, net of
current portion 13,958,827 14,258,343
DEFERRED COMPENSATION AND OTHER 1,755,025 1,629,848
COMMITMENTS AND CONTINGENCIES
REDEEMABLE STOCKS 6,959,412 5,659,948
ACCUMULATED DEFICIT (8,057,734) (3,343,589)
----------- -----------
Total liabilities, redeemable stock and
accumulated deficit $26,490,921 $26,548,652
=========== ===========
</TABLE>
The accompanying notes are an integral part of these balance sheets.
<PAGE> 11
THE CORVALLIS CLINIC, P.C.
STATEMENTS OF OPERATIONS
FOR THE THIRTEEN MONTHS ENDED DECEMBER 31, 1996 AND
THE YEARS ENDED NOVEMBER 30, 1995 AND 1994
<TABLE>
<CAPTION>
1996 1995 1994
----------- ----------- -----------
REVENUES:
<S> <C> <C> <C>
Fee-for-service, net $22,451,664 $20,704,589 $19,545,575
Prepaid healthcare, net 21,257,480 18,469,738 15,798,726
----------- ----------- -----------
Net revenues 43,709,144 39,174,327 35,344,301
Less- Provider compensation and benefits 11,419,464 13,209,215 13,729,125
----------- ----------- -----------
Net revenues less provider
compensation and benefits 32,289,680 25,965,112 21,615,176
----------- ----------- -----------
EXPENSES:
Clinic salaries, wages and benefits 15,620,339 12,579,457 10,403,834
Purchased medical services 6,182,411 4,716,727 3,081,120
Medical and office supplies 4,623,283 3,842,572 3,327,093
General and administrative expenses 3,315,234 3,560,219 3,157,030
Lease and rent expense 289,825 197,603 177,594
Provision for uncollectible accounts 1,270,141 1,767,545 1,181,471
Depreciation and amortization 1,689,791 1,114,947 1,005,715
----------- ----------- -----------
Total operating expenses 32,991,024 27,779,070 22,333,857
----------- ----------- -----------
Operating loss (701,344) (1,813,958) (718,681)
OTHER INCOME (EXPENSE):
Interest income 46,037 65,776 55,468
Interest expense (1,916,251) (1,223,370) (780,123)
Equity in income of affiliates 301,630 232,428 107,332
Other 465,812 631,945 58,852
----------- ----------- -----------
Net loss before provision for
income taxes (1,804,116) (2,107,179) (1,277,152)
----------- ----------- -----------
PROVISION FOR INCOME TAXES - - -
----------- ----------- -----------
NET LOSS $(1,804,116) $(2,107,179) $(1,277,152)
=========== =========== ===========
</TABLE>
The accompanying notes are an integral part of these statements.
<PAGE> 12
THE CORVALLIS CLINIC, P.C.
STATEMENTS OF CASH FLOWS
FOR THE THIRTEEN MONTHS ENDED DECEMBER 31, 1996 AND
THE YEARS ENDED NOVEMBER 30, 1995 AND 1994
<TABLE>
<CAPTION>
1996 1995 1994
----------- ----------- ------------
CASH FLOWS FROM OPERATING ACTIVITIES:
<S> <C> <C> <C>
Net loss $(1,804,116) $(2,107,179) $(1,277,152)
Adjustment to reconcile net loss to net
cash provided by (used in) operating
activities-
Depreciation and amortization 1,689,791 1,114,947 1,005,715
Equity in income of affiliates (301,630) (232,428) (107,332)
Equity in income of affiliate offset
against operating expenses 69,498 - -
Equity in income of affiliate offset
against interest expense (546,716) (288,927) -
Loss on sale of property, plant and
equipment 310 - 164,366
Loss on sale of equity interest in
affiliate 18,036 - -
Changes in operating assets and
liabilities:
Patient accounts receivable, net 71,686 363,674 (327,642)
Healthcare and other receivables (909,663) 425,736 110,955
Inventories of drugs and supplies 4,820 32,778 (13,138)
Prepaid expenses and deposits 283,130 (71,939) (66,424)
Other assets 89,882 (65,998) (23,884)
Accounts payable and accrued
expenses (439,726) 423,420 417,478
Income taxes payable (32,215) 32,215 -
Accrued healthcare costs 1,777,439 798,932 371,470
Accrued compensation and related
expenses (794,586) (3,002,229) 1,319,217
Deferred revenue (57,947) 50,132 (28,163)
Deferred compensation and other 125,177 140,531 127,668
----------- ----------- -----------
Net cash provided by (used in)
operating activities (756,830) (2,386,335) 1,673,134
----------- ----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property, plant and equipment (1,070,187) (3,203,644) (3,105,891)
Purchases of investments - (123,673) -
Cash distributions received from
investments 615,000 400,000 19,408
Cash distributions received from sale of
property, plant and equipment 279 - -
Cash distributions received from sale of
equity interest in affiliate 53,255 - -
----------- ----------- -----------
Net cash used in investing
activities (401,653) (2,927,317) (3,086,483)
----------- ----------- -----------
(continued)
</TABLE>
<PAGE> 13
THE CORVALLIS CLINIC, P.C.
STATEMENTS OF CASH FLOWS (CONTINUED)
FOR THE THIRTEEN MONTHS ENDED DECEMBER 31, 1996 AND
THE YEARS ENDED NOVEMBER 30, 1995 AND 1994
<TABLE>
<CAPTION>
1996 1995 1994
----------- ----------- ----------
CASH FLOWS FROM FINANCING ACTIVITIES:
<S> <C> <C> <C>
Net proceeds from borrowings under line of
credit agreement $ 1,921,000 $ 1,409,000 $ -
Proceeds from issuance of long-term debt 1,400,000 1,200,000 -
Principal payments on long-term debt and
direct financing lease obligation (674,249) (239,408) (140,712)
Proceeds from issuance of common stock 10,000 - 18,000
Proceeds from issuance of preferred stock - - 310,000
Payments for redemption of common stock (122,768) (23,000) (69,000)
Payments for redemption of preferred stock (57,000) (19,000) (48,000)
Proceeds from repayments of notes receivable from stockholders
81,081 136,925 143,549
Cash received in formation of HealthCare
Partners, LLC - 2,734,386 -
Costs incurred related to Physician
Partners, Inc. transaction (1,389,821) - -
----------- ----------- -----------
Net cash provided by financing
activities 1,168,243 5,198,903 213,837
----------- ----------- -----------
NET INCREASE (DECREASE) IN CASH AND CASH
EQUIVALENTS 9,760 (114,749) (1,199,512)
CASH AND CASH EQUIVALENTS, beginning of period 176,812 291,561 1,491,073
----------- ----------- -----------
CASH AND CASH EQUIVALENTS, end of period $ 186,572 $ 176,812 $ 291,561
=========== =========== ===========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW
INFORMATION:
Cash paid for interest $ 2,326,795 $ 891,190 $ 780,123
Cash paid (received) for income taxes 53,717 (41,558) 74,420
SUPPLEMENTAL DISCLOSURE OF NONCASH INVESTING AND FINANCING ACTIVITIES:
During 1995, Corvallis formed a limited liability company by contributing
certain real property and associated debt in exchange for a 50% ownership
interest in the new entity (Note 13).
Notes receivable from shareholders for purchase of stock during 1996, 1995
and 1994 were $13,000, $23,000 and $399,150, respectively.
Corvallis received a noncash distribution from an affiliate during 1996 of
$69,498.
Redemption of common stock in exchange for a payable of $132,057 during 1996.
</TABLE>
The accompanying notes are an integral part of these statements.
<PAGE> 14
THE CORVALLIS CLINIC, P.C.
STATEMENTS OF ACCUMULATED DEFICIT
FOR THE THIRTEEN MONTHS ENDED DECEMBER 31, 1996 AND
THE YEARS ENDED NOVEMBER 30, 1995 AND 1994
<TABLE>
<CAPTION>
<S> <C>
BALANCE, November 30, 1993 $ 1,373,766
Redemption of common stock (44,000)
Accretion of common stock (511,560)
Net loss (1,277,152)
-----------
BALANCE, November 30, 1994 (458,946)
Accretion of common stock (777,464)
Net loss (2,107,179)
-----------
BALANCE, November 30, 1995 (3,343,589)
Accretion of common stock (1,520,208)
Costs incurred related to Physician Partners, Inc. transaction (1,389,821)
Net loss (1,804,116)
-----------
BALANCE, December 31, 1996 $(8,057,734)
===========
</TABLE>
The accompanying notes are an integral part of these statements.
<PAGE> 15
THE CORVALLIS CLINIC, P.C.
NOTES TO FINANCIAL STATEMENTS
1. BUSINESS AND ORGANIZATION:
The Corvallis Clinic, P.C. (Corvallis), an Oregon professional corporation, is a
multi-specialty medical clinic. Corvallis was founded in 1947 with the belief
that group practice offers the best means of promoting and maintaining the
highest standards of medical care.
Corvallis consists of approximately 509 employees and 96 professional providers
who offer a wide range of primary and specialty care. In addition, Corvallis
offers ancillary services such as physical therapy, optical, pharmacy,
laboratory and imaging.
The majority of Corvallis operations are located in two facilities in Corvallis,
Oregon. In addition, Corvallis operates four satellite offices: Albany Family
Medicine, Corvallis Family Medicine, Philomath Family Medicine and Research
Park. A significant change in the demographics of this area may have an adverse
impact on the business.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND OTHER INFORMATION:
Selected accounting policies are discussed below. Other significant accounting
policies regarding revenues, income taxes, professional liability, deferred
compensation and investments in affiliates are discussed in specific notes that
follow.
Change in Fiscal Year End
Effective December 1, 1995, Corvallis changed its fiscal year end from
November 30 to December 31. Accordingly, the 1996 fiscal year ended December 31,
includes the results of operations for thirteen months, whereas the previous two
fiscal years ended on November 30.
Cash Equivalents
Cash equivalents consist of all highly liquid investments with original
maturities of three months or less.
Concentration of Credit Risk
Corvallis extends credit to patients covered by commercial insurance, Medicare
and Medicaid. Corvallis manages credit risk with the various public and private
insurance providers, as deemed appropriate by management. Allowances for
contractual discounts and uncollectible accounts have been made for potential
losses, where appropriate.
Inventories of Drugs and Supplies
Inventories are stated at the lower of cost or market, determined by the
first-in, first-out (FIFO) method.
<PAGE> 16
-2-
Property, Plant and Equipment
Property, plant and equipment are stated at cost. Maintenance, repairs and
minor replacements are expensed as incurred. When properties are retired or
otherwise disposed of, the related cost and accumulated depreciation are removed
from the respective accounts and any gain or loss on disposition is recorded as
other income or expense.
Depreciation is computed using both accelerated and straight-line methods over
the estimated useful lives of the respective assets. Equipment under capital
lease is amortized using the straight-line method over the shorter of the period
of the lease term or the estimated useful life of the equipment. Estimated lives
are as follows:
<TABLE>
<S> <C>
Building and building improvements 7-40 years
Furniture and equipment 5-15 years
</TABLE>
Accrued Healthcare Costs
Accrued healthcare costs are calculated based on reported claims and an estimate
based on historical data of incurred but not reported claims. These accrued
healthcare cost estimates will vary from actual results and the differences may
be significant.
Fair Value of Financial Instruments
The carrying amounts of cash and cash equivalents, patient accounts receivable,
accounts payable and accrued expenses are a reasonable estimate of their fair
value based on the short maturities of these instruments.
Interest rates that are currently available to Corvallis for issuance of debt
with similar terms and remaining maturities were used to estimate fair value for
debt issues. The current carrying value of debt approximates fair value.
Corvallis does not hold or issue financial instruments or derivative financial
instruments for trading purposes.
Notes Receivable from Stockholders
Corvallis maintains various agreements with stockholders for their purchase of
common stock. The notes bear interest at 6.52% and mature at various stages
through the year 2006.
Provider Compensation and Benefits
Provider compensation and benefits consists of the direct costs of patient care
providers such as physicians and other allied health professionals. A
substantial portion of these costs are paid to providers who are stockholders.
Use of Estimates
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions.
These estimates and assumptions 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.
Reclassifications
Certain prior year amounts have been reclassified to conform with the current
year presentation.
<PAGE> 17
-3-
3. REVENUES:
Corvallis reports its revenues according to two principal types of payment
methodologies as discussed below:
Prepaid Healthcare
Corvallis contracts with various Health Maintenance Organizations (HMOs) to
provide care to plan enrollees. These programs provide for a prepaid monthly
fixed capitation payment on a per member basis to Corvallis by the HMO for plan
enrollees.
The majority of the HMO contracts are full-risk or modified full-risk contracts.
Under a full-risk contract, Corvallis assumes the obligation of providing all
healthcare services to enrollees and is obligated to reimburse outside providers
for services rendered to enrollees. Generally, such payments to outside
providers are limited to out-of-area services, emergency services and services
not currently offered by Corvallis. Modified full-risk contracts are similar to
full-risk contracts except that the HMO is obligated to pay for out-of-area
services.
Corvallis has entered into subcapitation agreements with certain of these
outside providers. Under these agreements, Corvallis prepays the outside
provider based upon enrollee/participant formulas in which the subprovider
assumes the risk of providing patient care. Additional limitations on losses are
provided by the payment of stop loss reinsurance premiums and through a
percentage limitation on overall savings or losses of the programs.
Corvallis has accrued the claims associated with services provided by outside
providers for which Corvallis is responsible, and an estimate of incurred but
not reported claims is included in accrued healthcare cost in the accompanying
financial statements.
Corvallis follows the policy of netting prepaid healthcare revenues and
purchased medical services expenses for the institutional portion of capitated
agreements. Liabilities associated with these contracts are included in accrued
healthcare costs in the accompanying financial statements. Corvallis' revenue
associated with these contracts was approximately $16,699,000 and $11,945,000
for the thirteen months ended December 31, 1996 and the year ended November 30,
1995, respectively.
Fee-For-Service
Patient service revenues are recorded in the period in which services are
provided at established rates. Corvallis has agreements with third-party payors
that provide payments to Corvallis at amounts different from its established
rates. The difference between the established rates and the related payment
amounts are reflected as contractual discounts, as shown below:
<TABLE>
<CAPTION>
Year Ended November 30,
13 Months Ended ------------------------------
December 31, 1996 1995 1994
----------------- ----------- -----------
<S> <C> <C> <C>
Fee-for-service, gross $28,801,033 $25,778,976 $25,129,788
Contractual discounts 6,349,369 5,074,387 5,584,213
----------- ----------- -----------
Fee for service, net $22,451,664 $20,704,589 $19,545,575
=========== =========== ===========
</TABLE>
<PAGE> 18
-4-
A summary of the most significant fee-for-service arrangements is as follows:
Medicare
A significant portion of Corvallis' services are provided to Medicare
patients. Payments for Medicare outpatient services which are not
covered under capitated contracts are based on a prevailing fee
schedule. Approximately 16%, 15%, and 18% of net patient service
revenues were derived from services provided to fee-for-service
Medicare patients in 1996, 1995 and 1994, respectively.
Medicaid
Payments for Medicaid outpatient services which are not covered under
capitated contracts are based on a prevailing fee schedule.
Approximately 2%, 3% and 5% of net patient service revenues were
derived from services provided to fee-for-service Medicaid patients in
1996, 1995 and 1994, respectively.
Other Payors
Corvallis has also entered into payment agreements with certain
commercial insurance carriers and preferred provider organizations. The
basis for payment to Corvallis under these agreements includes
discounts from established charges.
Major Customers
Two customers in 1996, four customers in 1995 and two customers in 1994
represented individually more than 10% of Corvallis' net revenue as follows:
<TABLE>
<CAPTION>
13 Months Year Ended
Ended November 30,
December 31, ------------
1996 1995 1994
----------- --------------
<S> <C> <C> <C>
Pacificare - Commercial 21% 23% 19%
Pacificare - Secure Horizons 10 16 13
SelectCare - 10 -
Oregon Health Plan - 11 -
</TABLE>
4. PROPERTY, PLANT AND EQUIPMENT:
Property, plant and equipment consists of the following:
<TABLE>
<CAPTION>
December 31, November 30,
1996 1995
----------- ------------
<S> <C> <C>
Land and land improvements $ 666,565 $ 666,565
Buildings and leasehold improvements 19,448,346 14,109,506
Furniture and equipment 8,019,077 7,016,184
Construction in progress - 5,275,155
----------- -----------
28,133,988 27,067,410
Less- Accumulated depreciation (9,220,560) (7,533,789)
----------- -----------
$18,913,428 $19,533,621
=========== ===========
</TABLE>
<PAGE> 19
-5-
5. INCOME TAXES:
Income taxes are accounted for in accordance with Statement of Financial
Accounting Standards No. 109 (SFAS 109). SFAS 109 requires that Corvallis follow
the liability method of accounting for deferred income taxes. Differences
between financial reporting and income tax net operating losses are due
primarily to the use of the cash method of accounting for income tax purposes.
Corvallis has adopted a December 31 year-end for income tax purposes.
Deferred income taxes reflect the net tax effects of temporary differences
between the amount of assets and liabilities for financial reporting purposes
and the amounts used for income tax purposes. Significant components of
Corvallis' deferred tax assets and liabilities are as follows:
<TABLE>
<CAPTION>
December 31, November 30,
1996 1995
----------- -----------
Deferred tax assets:
<S> <C> <C>
Cash to accrual adjustments $ 4,261,000 $ 4,254,000
Net operating loss 832,000 1,135,000
Other 306,000 4,000
----------- -----------
Gross deferred tax assets 5,399,000 5,393,000
Less- Valuation allowance (1,778,000) (2,161,000)
----------- -----------
Net deferred tax asset 3,621,000 3,232,000
Deferred tax liabilities:
Cash to accrual adjustments (3,621,000) (3,232,000)
----------- -----------
Net deferred tax (liability) asset $ - $ -
=========== ===========
</TABLE>
Due to the differing fiscal periods, the federal and state net operating loss
carryforwards reported on the respective tax returns will differ from the
amounts reported above.
The differences between the provision (benefit) for income taxes and the amount
computed by applying the statutory federal income tax rate to income before
taxes were as follows:
<TABLE>
<CAPTION>
13 Months Year Ended
Ended November 30,
December 31, ---------------------------
1996 1995 1994
------------- ----------- ------------
<S> <C> <C> <C>
Federal tax at statutory rate $(604,000) $(716,000) $(434,000)
Add (deduct):
State income tax, net of federal
benefit (107,000) (126,000) (77,000)
Future tax benefits not recognized 699,000 849,000 510,000
Other 12,000 (7,000) 1,000
--------- --------- ---------
Provision for income taxes $ - $ - $ -
========= ========= =========
</TABLE>
<PAGE> 20
-6-
Nonrealized future tax benefits referred to above represent tax benefits related
to net operating loss (NOL) carryforwards. These benefits have not been
recognized in the accompanying financial statements because there is no
assurance these NOLs can be utilized in the future.
6. LONG-TERM DEBT:
Long-term debt consists of the following:
<TABLE>
<CAPTION>
December 31, November 30,
1996 1995
------------- -----------
<S> <C> <C>
Note payable interest at 10%, payable in monthly installments of $30,551 through
February 1999, secured by equipment $ 706,641 $1,007,818
Notepayable, interest at 9%, payable in monthly installments of $35,097 through
August 2000, secured by real equipment 1,303,972 -
---------- ----------
Total long-term debt 2,010,613 1,007,818
Less- Current portion (622,900) (278,365)
---------- ----------
Long-term debt, net of current portion $1,387,713 $ 729,453
========== ==========
</TABLE>
Scheduled maturities of long-term debt, including current maturity, are as
follows:
<TABLE>
<S> <C> <C>
1997 $ 622,900
1998 685,795
1999 430,654
2000 271,264
----------
$2,010,613
==========
</TABLE>
Lines of Credit
Corvallis maintains a revolving line-of-credit agreement with a bank providing
up to $2,500,000, secured by accounts receivable and inventory. Corvallis
maintains a second revolving line-of-credit agreement with a bank providing up
to $1,400,000 secured by business equipment. At December 31, 1996, borrowings
outstanding were $3,330,000. These lines of credit bear interest at the lender's
prime rate (8.25% at December 31, 1996) and are due on demand. At February 1,
1997, the $2,500,000 revolving line of credit was consolidated into a $7,500,000
line-of-credit as a result of the reorganization transaction (Note 14).
<PAGE> 21
-7-
7. LEASE COMMITMENTS:
Capital Lease
Corvallis leases certain equipment under an agreement which is classified as a
capital lease. The lease has an original term of five years and includes a
bargain purchase option. Lease equipment included in property, plant and
equipment is as follows:
<TABLE>
<CAPTION>
December 31, November 30,
1996 1995
-------- --------
<S> <C> <C>
Equipment $ 260,255 $ 260,255
Less- Accumulated amortization (177,841) (121,452)
--------- ---------
$ 82,414 $ 138,803
========= =========
</TABLE>
Operating Leases
Leases that do not meet the criteria for capitalization are classified as
operating leases. Such lease commitments are primarily for facilities and
equipment and the related rentals are charged to operations as incurred.
Future Minimum Lease Payments
Future minimum lease payments, by year and in the aggregate, under
noncancellable capital and operating leases with initial or remaining terms of
one year or more consist of the following at December 31, 1996:
<TABLE>
<CAPTION>
Capital Operating
Lease Leases
-------- --------
<S> <C> <C>
1997 $ 67,864 $180,620
1998 34,880 180,390
1999 - 183,640
2000 - 22,680
2001 - 22,680
Thereafter - 13,230
-------- --------
Total minimum lease payments 102,744 $603,240
Amounts representing interest (9,541) ========
--------
Present value of minimum payments 93,203
Current portion (55,071)
--------
Long-term capitalized lease obligations $ 38,132
========
</TABLE>
<PAGE> 22
-8-
Direct Financing Lease Obligation
In June of 1995, Corvallis contributed land, buildings, construction in process
and related notes payable to HealthCare Partners, LLC (Note 13). At the date of
transfer, Corvallis entered into 30-year lease agreements for the Asbury,
Aumann, CFM and PFM buildings and a 5-year lease agreement for the Albany
building. Monthly rental payments under these leases are $183,576. The assets
were sold under a sale/leaseback arrangement and, therefore, this is being
accounted for as a financing transaction wherein the assets remain on the books
and continue to be depreciated. Corvallis recorded a direct financing lease
obligation for cash received by Corvallis and obligations assumed by the LLC as
part of the transaction.
The liability for this lease obligation was $14,141,665 at December 31, 1996 and
$14,356,463 at November 30, 1995. Scheduled principal payments at December 31,
1996 are as follows:
<TABLE>
<S> <C> <C>
1997 $ 220,970
1998 242,667
1999 266,496
2000 286,655
2001 244,027
Thereafter 12,880,850
-----------
$14,141,665
===========
</TABLE>
8. RETIREMENT PLANS:
401(k) Profit Sharing Plan
Corvallis has a 401(k) Profit-Sharing Plan (the 401(k) Plan) in which all
employees are eligible to participate subject to certain eligibility criteria.
The 401(k) Plan permits employees to contribute up to 10% of their annual
compensation (not to exceed certain annual limits imposed by the Internal
Revenue Code). Corvallis is required to make matching contributions equal to 50%
of employee contributions up to 8% of the employee's compensation. Corvallis may
also make discretionary contributions. Clinic contributions are 100% vested.
Money-Purchase Pension Plan
Corvallis also has a Money-Purchase Pension Plan in which all employees are
eligible to participate subject to certain eligibility criteria. Corvallis
contributes 5.4% of the employee's eligible earnings up to $48,481 and 10.8% of
eligible earnings in excess of $48,481. These contributions are 100% vested upon
eligibility.
Corvallis' contributions for these plans for the 13-month period ended December
31, 1996 and the years ended November 30, 1995 and 1994 were approximately
$1,494,000, $2,010,000 and $1,813,000, respectively.
9. PROFESSIONAL LIABILITY:
Corvallis maintains a claims-made professional liability insurance policy. The
policy coverage is $5,000,000 per claim, with no aggregate maximum limit for
claims made against Corvallis and its employees. Accruals for outstanding claims
and the associated deductibles are made in the period in which the event becomes
known. Corvallis also accrues an actuarial estimate of the future liability for
claims incurred but not reported prior to the end of the accounting period.
<PAGE> 23
-9-
At February 1, 1997, Corvallis' professional liability insurance policy was
consolidated into a Physician Partners, Inc. policy as a result of the
reorganization transaction (Note 14). The consolidated claims-made policy has no
deductible. The policy coverage is $2,000,000 per claim, with an aggregate limit
of $4,000,000 and includes full prior acts coverage.
10. REDEEMABLE STOCK:
Corvallis has three classes of stock which are redeemable at the option of the
shareholders upon retirement, termination of employment and certain other
events. A summary of the activity in these stock accounts for the period
November 30, 1993 through December 31, 1996, together with other information, is
presented below:
<TABLE>
<CAPTION>
Class A Class B Class C
Voting Preferred Voting Common Nonvoting Preferred Notes
------------------ ----------------- ------------------- Receivable
Shares Carrying Shares Carrying Shares Carrying From
Issued Value Issued Value Issued Value Stockholders Total
------ ----- ------ ----- ------ ----- ------------ -----
<S> <C> <C> <C> <C> <C> <C> <C> <C>
BALANCE, November 30, 1993 62 $1,117,636 11,335 $2,631,745 6,140 $614,000 $(485,931) $3,877,450
Stock issued 9 207,000 700 210,150 3,100 310,000 (399,150) 328,000
Stock redeemed (3) (25,000) - - (480) (48,000) - (73,000)
Accretion - 58,817 - 452,743 - - - 511,560
Payments of notes receivable - - - - - - 143,549 143,549
--- ---------- ------ ---------- ------- -------- --------- ----------
BALANCE, November 30, 1994 68 1,358,453 12,035 3,294,638 8,760 876,000 (741,532) 4,787,559
Stock issued 1 23,000 - - - - (23,000) -
Stock redeemed (1) (23,000) - - (190) (19,000) - (42,000)
Accretion - 5,661 - 771,803 - - - 777,464
Payments of notes receivable - - - - - - 136,925 136,925
--- ---------- ------ ---------- ------- -------- --------- ----------
BALANCE, November 30, 1995 68 1,364,114 12,035 4,066,441 8,570 857,000 (627,607) 5,659,948
Stock issued 1 23,000 - - - - (13,000) 10,000
Stock redeemed (5) (115,000) (235) (139,825) (570) (57,000) - (311,825)
Accretion - 78,566 - 1,441,642 - - - 1,520,208
Payments of notes receivable - - - - - - 81,081 81,081
--- ---------- ------ ---------- ------- -------- --------- ----------
BALANCE, December 31, 1996 64 $1,350,680 11,800 $5,368,258 8,000 $800,000 $(559,526) $6,959,412
=== ========== ====== ========== ======= ======== ========== ==========
Current redemption value per share $ 23,000 $ 595 $ 100
========== ========== ========
Redemption value for shares issued $1,472,000 $7,021,000 $800,000
========== ========== ========
Total authorized shares 200 25,000 100,000
=== ====== =======
</TABLE>
The carrying value of the Class A and Class B shares are being increased
(accreted) to the redemption price using the effective interest rate through the
earliest estimated redemption date. Currently, none of the shares are redeemable
at a certain date. Accordingly, no determination can be made of redemption
requirements for specific years in the future.
<PAGE> 24
-10-
11. DEFERRED COMPENSATION:
Corvallis provides compensation to eligible shareholders who retire based upon
average shareholder income, as defined in the Employment Agreement, for the
first three years following retirement. Provider/shareholder retirees who have
20-1/2 years of service and attain age 65 while in service with Corvallis are
eligible to receive such deferred retirement compensation. The deferred
compensation recorded in the accompanying financial statements is the net
present value of the future obligations recognized for the years of service.
12. COMMITMENTS AND CONTINGENCIES:
Legal Proceedings
Corvallis is subject to various legal proceedings and claims which arise in the
ordinary course of business. In the opinion of management, although the ultimate
dispositions of these proceedings are not determinable, adverse determinations
in any or all of such proceedings would not have a material adverse effect upon
the financial position or results of operations of Corvallis.
Employment Obligations
Effective December 18, 1996, the chief executive officer's employment with
Corvallis was terminated. The severance agreement costs have been expensed in
1996.
Other Commitments
References of other commitments are made in the discussion of various lease
commitments and related debt guarantees in Notes 7 and 13.
13. INVESTMENTS IN AFFILIATES:
The Company's investments in affiliates consist of investments in various
entities which are accounted for on the equity method. The names of these
entities, carrying values and the percent of ownership held by Corvallis are
summarized below:
<TABLE>
<CAPTION>
Carrying Value at
------------------
Percent December 31, November 30,
Investee Owned 1996 1995
---------------------------- ------- ------------ -------------
<S> <C> <C> <C>
Corvallis MRI 33% $217,688 $231,058
HealthCare Partners, LLC 50 436,537 259,319
Healthquest - - 71,291
-------- --------
$654,225 $561,668
======== ========
</TABLE>
Additional information regarding these investments is discussed below.
Corvallis MRI:
Corvallis holds a one-third interest in Corvallis MRI, a partnership organized
in 1988 which owns and operates a magnetic resonance imaging (MRI) scanner. The
MRI unit is housed in facilities leased from Good Samaritan Hospital, another
partner, and operated by Corvallis Radiology, P.C., the third partner.
Summarized financial information of Corvallis MRI for its December 31 fiscal
year is presented below:
<PAGE> 25
-11-
Balance sheet data-
<TABLE>
<CAPTION>
As of December 31,
---------------------------
1996 1995
---------- ----------
<S> <C> <C>
Current assets $ 461,072 $ 618,677
Fixed assets 1,034,361 1,288,043
Other assets 40,000 -
---------- ----------
Total assets $1,535,433 $1,906,720
========== ==========
Current liabilities $ 399,787 $ 346,383
Long-term debt 437,584 796,735
Other long-term liabilities 45,000 -
Partners' equity 653,062 763,602
---------- ----------
Total liabilities and Partners' equity $1,535,433 $1,906,720
========== ==========
</TABLE>
Operations data-
<TABLE>
<CAPTION>
Year Ended December 31,
-------------------------------------------
1996 1995 1994
---------- ---------- ----------
<S> <C> <C> <C>
Revenues $1,827,753 $1,657,619 $1,303,800
Operating expenses (936,558) (834,435) (746,580)
Other income (expense) (56,734) (83,351) (83,592)
---------- ---------- ----------
$ 834,461 $ 739,833 $ 473,628
========== ========== ==========
</TABLE>
During 1996, 1995 and 1994, payments to Corvallis MRI for services provided to
Corvallis were $143,072, $61,785 and $65,504, respectively, and are included in
purchased services.
HealthCare Partners, LLC
During the year ended November 30, 1995, Corvallis entered into a joint venture
agreement with Good Samaritan Hospital, Corvallis to form a limited liability
company to own and manage Corvallis' buildings and real properties and to serve
as a vehicle for financing future property expansion for Corvallis. Corvallis
contributed assets and liabilities in exchange for a 50% membership interest in
the limited liability company.
The net book value of assets and liabilities contributed by Corvallis was
$13,804,704 for buildings, land and construction in progress and $8,363,298 for
related debt. In addition, Corvallis received $2,734,386 in cash reimbursements
for the market value of the above contributed net assets in excess of the
Hospital's contributed equity, as measured at the date of formation of the
limited liability company.
<PAGE> 26
-12-
This transaction has been accounted for as a financing due to the continuing
involvement of Corvallis in the assets through its ownership interest in the
limited liability company. Accordingly, the contributed property remains as an
asset of Corvallis. The debt at the transaction date, together with the cash
received for the excess value of the contributed net assets, has been included
in the related financing obligations (Note 7).
Summarized financial information of HealthCare Partners, LLC for its fiscal year
is presented below:
Balance sheet data-
<TABLE>
<CAPTION>
December 31,
--------------------------------
1996 1995
----------- -----------
<S> <C> <C>
Current assets $ 271,240 $ 276,548
Financing lease receivable 17,993,030 18,095,340
Property and improvements 6,267,652 5,357,704
Other assets 145,494 175,414
----------- -----------
Total assets $24,677,416 $23,905,006
=========== ===========
Current liabilities $ 2,053,542 $ 1,211,560
Long-term debt 7,842,940 8,014,916
Members' equity 14,780,934 14,678,530
----------- -----------
Total liabilities and Members' equity $24,677,416 $23,905,006
=========== ===========
</TABLE>
Operations data-
<TABLE>
<CAPTION>
Inception
December 31, (June 1) through
1996 December 31, 1995
------------ -----------------
<S> <C> <C>
Revenues $2,506,116 $1,257,835
Expenses 1,664,715 679,981
---------- ----------
Net income $ 841,401 $ 577,854
========== ==========
</TABLE>
Revenues include interest income of $1,962,385 for the year ended
December 31, 1996 and $1,149,055 for the 1995 period relating to the financing
lease with Corvallis. As a substantial portion of the joint venture's income is
derived from payments made by Corvallis for this interest income, Corvallis'
share of earnings from the joint venture is offset against interest expense in
the accompanying statements of income.
Concurrent with the formation of the limited liability company, Corvallis has
entered into a lease agreement relating to buildings and properties which were
contributed to the limited liability company and are occupied by Corvallis.
Future minimum rental commitments under the agreement are approximately
$2,159,000 per year for the first 5 years and approximately $2,054,000 per year
for the next 25 years, subject to fair market value adjustments after the first
five years.
Corvallis has guaranteed approximately $6,100,000 of long-term debt associated
with the above joint venture.
<PAGE> 27
-13-
Healthquest
During 1996, Corvallis' sold their interest in Healthquest to one of the other
partners. Corvallis recognized a loss on the sale of their investment of $18,036
included in the accompanying financial statements.
14. SUBSEQUENT EVENTS:
The shareholders and Board of Directors of Corvallis approved a Reorganization
and Merger Agreement (the Agreement) dated February 1, 1997 together with the
shareholders and Board of Directors of HealthFirst Medical Group P.C.; the
Medford Clinic P.C.; and Physician Partners, Inc. (PPI), a newly formed company.
The transaction resulted in a separation of operations of the three founding
medical groups between medical professional services activities (i.e., providers
of medical services) and the physician practice management activities of the
business. The professional services activities were spun off into newly formed
professional corporations (New PCs). The physician practice management business,
along with substantially all of the assets and liabilities of the three founding
medical groups: cash, receivables, inventory, prepaids, property, plant and
equipment, other assets, payables, accruals, debt and contractual commitments,
was transferred to PPI. The shareholders of the three founding clinics became
the original shareholders of PPI.
An integral part of the reorganization is a 40-year management agreement whereby
PPI provides physician practice management services to the New PCs. Services
provided include management and administrative services, capital resources,
facilities, equipment and supplies.
As consideration, PPI is entitled to (a) reimbursement of all managerial costs
and expenses (Manager's Expenses) incurred by PPI and (b) a management fee equal
to 16% of (i) net revenues relating to services provided by the New PCs less
(ii) Manager's Expenses.
The New PCs are responsible for providing medical services and the related costs
for provider compensation and benefits.
The parties to the reorganization transaction have received an opinion from tax
counsel that for federal income tax purposes, it is more likely than not that
the reorganization will be a tax-free transaction. No ruling will be requested
from the Internal Revenue Service regarding the tax consequences of the
transaction. If the IRS or tax court were to determine that the transactions
were not tax free, there would be significant adverse tax consequence to the
parties to the transaction and their respective shareholders.
In connection with the reorganization transaction, the three founding medical
groups have entered into an Expense Sharing Agreement which establishes the
basis upon which certain costs incurred in connection with the transactions are
to be allocated between the three groups. Corvallis' share of such costs are
reflected as a charge to equity in the accompanying statement of accumulated
deficit. At December 31, 1996, Corvallis owed $328,626 related to this
agreement, which was included in accounts payable in the accompanying financial
statements.
<PAGE> 28
SIGNATURES
See General Instruction D
Pursuant to the requirements of Section 13 or 15(d) 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.
THE CORVALLIS CLINIC, P.C.
(Registrant)
By /s/ John R. Ladd, M.D.
John R. Ladd, M.D.
President and Director
4/2/97
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.
By /s/ Christopher P. Swan, M.D.
Christopher P. Swan, M.D.
Secretary, Treasurer and Director
4/3/97
By /s/ Darrel D. Bibler, M.D.
Darrel D. Bibler, M.D.
Director
4/3/97
By /s/ Nick C. Benton, M.D.
Nick C. Benton, M.D.
Director
4/2/97
By /s/ Surinder M. Vasdev, M.D.
Surinder M. Vasdev, M.D.
Director
4/2/97
