U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
- - - - - - - - - - - - - - - - - -
FORM 10-QSB
(MARK ONE)
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 1997
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15 (d)
OF THE EXCHANGE ACT
FOR THE TRANSITION PERIOD FROM _______________ TO __________________
COMMISSION FILE NUMBER: 0-23055
- - - - - - - - - - - - - - - - - - - - - - - - - - - -
OMEGA ORTHODONTICS, INC.
(EXACT NAME OF SMALL BUSINESS ISSUER AS
SPECIFIED IN ITS CHARTER)
DELAWARE 95-4596853
(STATE OR OTHER JURISDICTION (I.R.S.EMPLOYER
OF INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
3621 SILVER SPUR LANE
ACTON, CALIFORNIA 93510
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
ISSUER'S TELEPHONE NUMBER, INCLUDING AREA CODE: 805-269-2841
- - - - - - - - - - - - - - - - - - - - - - - - - - - -
Check whether the Issuer (1) filed all reports required to be
filed by Section 13 or 15 (d) of the Exchange Act during the
past 12 months (or for such shorter period that the registrant
was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days.
Yes [ ] No [X] *
* The Issuer became subject to the reporting requirements of
Section 13 of the Exchange Act on October 1, 1997.
The number of shares of Common Stock of the Issuer, par value
$.01 per share, outstanding at November 10, 1997 was 4,220,314.
OMEGA ORTHODONTICS, INC.
FORM 10-QSB REPORT INDEX
Part I - Financial Information
Item 1 - Financial Statements
Balance Sheets September 30, 1997 (Unaudited) and
December 31, 1996
Statements of Operations Three Months and Nine Months Ended
September 30, 1997 and the Period from August 30, 1996
(inception) to September 30, 1996 (Unaudited)
Statements of Cash Flows Nine Months Ended September 30,
1997 and the Period from August 30, 1996 (inception)
to September 30, 1996 (Unaudited)
Notes to Financial Statements
Item 2 - Management's Plan of Operation
Part II -- Other Information
Item 1 Legal Proceedings
Item 2 Changes in Securities
Item 3 Defaults upon Senior Securities
Item 4 Submission of Matters to a Vote of Security Holders
Item 5 Other Information
Item 6 Exhibits and Reports on Form 8-K
Signatures
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
General Information
On October 6, 1997, Omega Orthodontics, Inc. (the "Company")
acquired (the "Acquisitions") simultaneously with the closing
of its initial public offering (the "Offering") of its Common
Stock, par value $.01 per share (the "Common Stock"),
substantially all the equity interests in the management
services organizations that hold certain assets of and are
associated with seven orthodontics practices (except in the
case of two sole proprietorships where it acquired certain
assets of such proprietorships) (such practices are referred
to collectively as the "Initial Orthodontic Affiliates" and
such management services organizations are referred to
collectively as the "Initial MSOs") in exchange for shares of
the Company's Common Stock, cash, notes payable, stock options
and the assumption of certain liabilities.
The financial statements herein have been prepared by the
Company without audit, pursuant to the rules and regulations
of the Securities and Exchange Commission (the "SEC").
Pursuant to such regulations, certain information and
footnote disclosures normally included in financial
statements prepared in accordance with generally accepted
accounting principles have been condensed or omitted. The
Company believes the presentation and disclosures herein are
adequate to make the information not misleading, and the
financial statements reflect all normal adjustments that are
necessary for a fair presentation of the results for the
interim period ended September 30, 1997.
Operating results of interim periods are not necessarily
indicative of the results for full years. It is suggested
that these financial statements be read in conjunction with
the financial statements of the Company and related notes
thereto, and management's plan of operations related thereto,
all of which are included in the prospectus contained in
Amendment No. 4 to Company's Registration Statement on Form
SB-2 (No. 333-27179), filed with the SEC and which was declared
effective on October 1, 1997.
OMEGA ORTHODONTICS, INC.
BALANCE SHEETS
September 30 December 31,
1997 1996
(UNAUDITED)
ASSETS
Current assets:
Cash and cash equivalents $ 18,730 $321,057
Accounts receivable net of
allowance for doubtful
accounts of $0 and $5,700
at September 30, 1997
and December 31, 1996, respectively
Trade 3,500 8,900
Related parties 7,489 9,396
---------- --------
10,989 18,296
Prepaid expenses and other assets 3,000 4,000
---------- --------
Total current assets 32,719 343,353
Equipment, net 9,766 10,096
Other assets, net 1,357,697 137,474
--------- --------
Total assets $1,400,182 $490,923
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current liabilities:
Accounts payable $1,022,698 $ 21,234
Due to related parties 756,886 27,036
Accrued expenses 27,291 88,115
Notes payable 1,085,000 575,000
--------- --------
Total current liabilities 2,891,875 711,385
Due to related parties,
less current portion 302,400 -
Commitments and contingencies
Stockholders' deficit:
Common stock, $.01 par value,
10,000,000 shares
authorized, 1,685,000 and
1,615,000 shares issued
and outstanding at September 30,
1997 and December 31, 1996,
respectively 16,850 16,150
Additional paid-in capital 2,020,500 -
Accumulated deficit (3,831,443) (232,112)
Deferred compensation - (4,500)
---------- -------
Total stockholders' deficit (1,794,093) (220,462)
Total liabilities and stockholders'
deficit $ 1,400,182 $ 490,923
See accompanying notes.
OMEGA ORTHODONTICS, INC.
STATEMENTS OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
For the Period For the Period
From August From August
Nine Months 30, 1996 Three Months 30, 1996
Ended (inception) to Ended (inception) to
September 30, September 30, September 30, September 30,
1997 1996 1997 1996
Revenue:
Management consulting fees $ 55,284 $ - $ 10,713 $ -
Direct expenses:
Employee costs 159,853 6,118 52,275 6,118
Other costs 55,098 4,798 11,242 4,798
---------- ---------- --------- ----------
Total direct expenses 214,951 10,916 63,517 10,916
Non-recurring consulting
expense 2,867,400 - - -
General and administrative 431,354 4,602 153,802 4,602
Depreciation 2,742 99 914 99
---------- ---------- --------- ----------
Operating loss (3,461,163) (15,619) (207,520) (15,619)
Interest income 2,556 - 233 -
Interest expense (140,724) 770 (59,579) 770
---------- ---------- --------- ----------
Net loss ($3,599,331) ($16,387) ($266,866) ($16,387)
Net loss per share ($ 2.14) ($ .01) ($ .16) ($ .01)
Shares used to compute
net loss per share 1,685,000 1,685,000 1,685,000 1,685,000
See accompanying notes.
</TABLE>
OMEGA ORTHODONTICS, INC.
STATEMENTS OF CASH FLOWS
(UNAUDITED)
For the Period
From August
Nine Months 30, 1996
Ended (inception) to
September 30, September 30,
1997 1996
Operating activities
Net loss ($3,599,331) ($16,387)
Adjustments to reconcile net loss
to net cash used in operating
activities:
Amortized debt financing costs 50,244 328
Provision for bad debts 3,900 -
Depreciation and amortization 2,742 99
Stock compensation 2,867,400 -
Changes in operating assets
and liabilities:
Accounts receivable 3,407 -
Prepaid expenses and other assets 1,000 -
Accounts payable 1,001,464 82
Due to related parties 189,850 15,716
Accrued expenses (60,824) 770
--------- -------
Net cash used in operating activities 459,852 608
Investing activities
Purchases of equipment (1,712) -
Net cash used in investing activities (1,712) -
Financing activities
Deferred offering costs (1,249,567) -
Debt financing costs (20,900) (2,615)
--------- -------
Proceeds from issuance of notes payable 510,000 375,000
Net cash provided by financing
activities (760,467) 372,385
Net increase (decrease) in cash
and cash equivalents (302,327) 372,993
Cash and cash equivalents at
beginning of period 321,057 -
--------- --------
Cash and cash equivalents at
end of period $18,730 $372,993
Supplemental disclosures:
Interest paid $74,260 $ -
See accompanying notes.
1. BASIS OF PRESENTATION
The Company
Omega Orthodontics, Inc., (the Company) was incorporated in
Delaware in August 1996 and subsequently acquired the
assets and certain consulting contracts held by The
Orthodontic Management Effectiveness Group of America, LLC
(Omega, LLC), a California-based orthodontic practice
management and consulting firm, in exchange for 1,050,000
shares of the Company's common stock.
The Company provides management and marketing services to
orthodontic practices in the United States. The Company
offers its services primarily under an "affiliate"
relationship whereby it purchases the equity interests of
the management services organization that holds certain
assets of and is associated with an orthodontic practice
and enters into a long term management services agreement
with the practice of the selling orthodontist. Pursuant to
that agreement, the Company receives a monthly management
fee for providing all of the orthodontist's practice needs,
including facility, staff and supplies, as well as a
program of systems, methods and procedures designed to
enhance the growth, efficiency and profitability of the
practice.
Basis of Presentation
The balance sheet at September 30, 1997, the statements of
operations for the three months and nine months ended
September 30, 1997 and for the period from August 30, 1996
(inception) to September 30, 1996 and the statements of
cash flows for the nine months ended September 30, 1997 and
for the period from August 30, 1996 (inception) to
September 30, 1996 are unaudited, but, in the opinion of
management, include all adjustments (consisting of normal
recurring adjustments) necessary for a fair presentation of
results for the interim periods. The results of operations
for the nine months ended September 30, 1997 are not
necessarily indicative of results to be expected for the
entire year. These financial statements should be read in
conjunction with the Company's financial statements, and
related notes thereto, included in the prospectus contained
in Amendment No. 4 to the Company's Registration Statement
on Form SB-2 (No. 333-27179), filed with the Securities and
Exchange Commission and which was declared effective
October 1, 1997.
Recently Issued Accounting Pronouncements
In June 1997, the Financial Accounting Standards Board
issued Statement No. 130, "Reporting Comprehensive Income"
which is required to be adopted for fiscal years beginning
after December 15, 1997. The statement establishes
standards for the reporting and display of comprehensive
income and its components in a full set of general purpose
financial statements. Adoption of this standard is not
expected to have a material impact of the Company's
financial statements or results of operations.
In June 1997, the Financial Accounting Standards Board
issued Statement No. 131, "Disclosures about Segments of
and Enterprise and Related Information" which is required
to be adopted for fiscal years beginning after December 15,
1997. The statement changes the way public companies
report segment information in annual financial statements
and also requires those companies to report selected
segment information in interim financial reports to
shareholders. Adoption of this standard is not expected to
have a material impact of the Company's financial
statements or results of operations.
Net Loss Per Share
Net loss per share is computed using the weighted average
number of outstanding shares of common stock and common
stock equivalents, and the exercise of stock options (using
the treasury stock method). Common stock equivalent shares
are excluded from the computation if their effect is anti-
dilutive; however, pursuant to the requirements of the
Securities and Exchange Commission, common shares and
common equivalent shares relating to stock options (using
the treasury stock method and the initial public offering
price) issued during the twelve months prior to the filing
of an initial public offering are considered outstanding
for all periods presented whether or not they are anti-
dilutive.
In February 1997, the Financial Accounting Standards Board
issued Statement No. 128, "Earnings per Share," which is
required to be adopted on December 31, 1997. At that time,
the Company will be required to change the method currently
used to compute earnings per share and to restate all prior
periods. Under the new requirements for calculating basic
earnings per share, the dilutive effect of stock options
will be excluded. The impact is not expected to result in
a change in basic loss per share for the nine months and
three months ended September 30, 1997 or in the basic loss
per share for the period ended September 30, 1996. The
impact of Statement No. 128 on the calculation of fully
diluted earnings per share for those periods is not
expected to be material
2.INITIAL PUBLIC OFFERING
On October 6, 1997, the Company closed its initial public
offering pursuant to which the Company sold 2,070,000
shares of common stock and 2,070,000 common stock purchase
warrants. The Company received proceeds from the offering,
net of the underwriter discounts, fees and expenses, of
approximately $9.8 million. From the net proceeds, the
Company paid in full the notes payable used to finance
operations prior to the offering and paid the cash portion
of the affiliations with seven orthodontists, resulting in
cash available after the offering and related expenses of
approximately $6 million.
3.NEW ORTHODONTIST AFFILIATIONS
On October 6, 1997, the Company entered into Management
Services Agreements with seven Initial Orthodontic
Affiliates in the United States, simultaneously with the
closing of its initial public offering (see Note 2). These
agreements provide for the purchase by the Company of the
equity interests in the management services organization
("Initial MSOs") formed by the selling orthodontist for
consideration ranging from $342,000 to $1,082,000 for each
such Initial MSOs. Total consideration related to the
affiliations with the Initial MSOs is summarized as follows:
Common Stock $2,791,884
Cash 2,111,797
Notes Payable 142,535
TOTAL $5,046,216
The cost of each of the Initial MSOs has been allocated on
the basis of the estimated fair market value of the assets
acquired and liabilities assumed, resulting in intangible
assets of $5.2 million, net of deferred income taxes.
These allocations may be adjusted to the extent that
management becomes aware of additional information which
results in a material change in the amount of any
contingency or changes in the estimated fair market value
of assets acquired and liabilities assumed.
Concurrent with the affiliation with the Initial MSOs, the
Company and each Initial MSO entered into a 20-year
management services agreement, renewable for an additional
20 years, with each affiliate orthodontist. The agreement
stipulates that the Initial MSO provide practice management
and marketing services, facilities and non-clinical
personnel to the affiliate orthodontist for a monthly fee,
generally equal to 65% to 75% of the affiliate
orthodontist's gross patient fee collections. Conversely,
the affiliate orthodontist has sole authority to direct the
business, professional and ethical aspects of the practice,
make all professional hiring decisions, render patient
care, and keep all patient dental records. Each affiliate
orthodontic practice has also entered into an employment
agreement, including non-competition provisions, with each
orthodontist employed and has agreed to pay all salaries
for dental professionals, professional licensure and board
certification fees and professional liability insurance
premiums.
Each affiliate orthodontist has certain rights and
obligations to repurchase, and each Initial MSO has the
right to require the affiliate orthodontist to repurchase,
the non-clinical practice assets held by such Initial MSO
in the event that the management services agreement is
terminated. Such purchases will generally require payment
of the book value of the net assets of the Initial MSO.
The Initial MSO also has certain rights to designate a
successor orthodontist to acquire the practice of the
affiliate orthodontist when the orthodontist ceases
practice.
The affiliations resulted in substantial intangibles of
approximately $5.2 million, net of deferred income taxes,
which will be amortized over the term of the management
services agreements, including renewals, or forty years.
Financial data for the year ended December 31, 1996 related
to the Initial Orthodontic Affiliates are summarized as
follows:
Patient Revenues $ 4,615,677
Cash Collections 4,486,113
Practice Expenses 4,076,863
Practice expenses includes $1,014,584 in orthodontists'
compensation.
4.STOCKHOLDERS' DEFICIT
On February 12, 1997, the Board of Directors voted to amend
the Certificate of Incorporation and revise the number of
authorized shares of common stock to 9,500,000 and
authorize 500,000 shares of preferred stock, $.01 par
value. The preferred stock shares will be issuable in one
or more series, each such series to have such rights and
preferences, including voting rights, dividend rights,
conversion rights, redemption privileges and liquidation
preferences, as shall be determined by the Board of
Directors.
The Company adopted a Stock Incentive Plan (the Plan)
effective January 31, 1997. Plan awards in the form of
stock options, stock appreciation rights, restricted stock,
and stock grants may be issued to employees, consultants
and advisors of the Company at prices to be determined by
the Board of Directors. The Plan will terminate on January
30, 2007. A total of 450,000 shares of common stock have
been reserved for issuance under the Plan. The Company has
granted stock options under the Plan for an aggregate of
350,000 shares of common stock, vesting ratably over
periods of one to three years at an exercise price equal to
$6.00 per share.
ITEM 2. MANAGEMENT'S PLAN OF OPERATIONS
THE FOLLOWING CONTAINS CERTAIN FORWARD-LOOKING STATEMENTS
REGARDING THE PLANS AND OBJECTIVES OF MANAGEMENT FOR FUTURE
OPERATIONS INCLUDING PLANS AND OBJECTIVES RELATING TO THE
DEVELOPMENT OF THE ORTHODONTIC AFFILIATES. THE FORWARD-
LOOKING STATEMENTS INCLUDED HEREIN ARE BASED ON CURRENT
EXPECTATIONS THAT INVOLVE NUMEROUS RISKS AND UNCERTAINTIES.
THE COMPANY'S PLANS AND OBJECTIVES ARE BASED ON A
SUCCESSFUL EXECUTION OF THE COMPANY'S EXPANSION STRATEGY
AND ASSUMPTIONS THAT THE ORTHODONTIC AFFILIATES WILL BE
PROFITABLE, THAT THE ORTHODONTIC INDUSTRY WILL NOT CHANGE
MATERIALLY OR ADVERSELY, AND THAT THERE WILL BE NO
UNANTICIPATED MATERIAL ADVERSE CHANGE IN THE COMPANY'S
OPERATIONS OR BUSINESS. ASSUMPTIONS RELATING TO THE
FOREGOING INVOLVE JUDGMENTS WITH RESPECT TO, AMONG OTHER
THINGS, FUTURE ECONOMIC, COMPETITIVE AND MARKET CONDITIONS
AND FUTURE BUSINESS DECISIONS, ALL OF WHICH ARE DIFFICULT
OR IMPOSSIBLE TO PREDICT ACCURATELY AND MANY OF WHICH ARE
BEYOND THE CONTROL OF THE COMPANY. ALTHOUGH THE COMPANY
BELIEVES THAT ITS ASSUMPTIONS UNDERLYING THE FORWARD-
LOOKING STATEMENTS ARE REASONABLE, ANY OF THE ASSUMPTIONS
COULD PROVE INACCURATE AND, THEREFORE, THERE CAN BE NO
ASSURANCE THAT THE FORWARD-LOOKING STATEMENTS INCLUDED IN
THE FOLLOWING WILL PROVE TO BE ACCURATE. IN LIGHT OF THE
SIGNIFICANT UNCERTAINTIES INHERENT IN THE FORWARD-LOOKING
STATEMENTS INCLUDED HEREIN, PARTICULARLY IN VIEW OF THE
COMPANY'S EARLY STAGE OF OPERATIONS, THE INCLUSION OF SUCH
INFORMATION SHOULD NOT BE REGARDED AS A REPRESENTATION BY
THE COMPANY OR ANY OTHER PERSON THAT THE OBJECTIVES AND
PLANS OF THE COMPANY WILL BE ACHIEVED. THE FOLLOWING
SHOULD BE READ IN CONJUNCTION WITH THE FINANCIAL STATEMENTS
AND NOTES APPEARING ELSEWHERE IN THIS REPORT AND THE
COMPANY'S PRIOR FILINGS WITH THE SECURITIES AND EXCHANGE
COMMISSION.
General
The Company was incorporated in Delaware in August 1996 to
provide practice management services to orthodontic
practices. On October 6, 1997, the Company acquired
simultaneously with the closing of its initial public
offering substantially all the equity interests in the
Initial MSO's that hold certain assets of and are
associated with seven orthodontic practices.
The Company offers its services primarily under an
affiliate relationship whereby it will purchase the equity
interests in the orthodontic practice's MSO pursuant to an
Affiliation Agreement and enter into a long term Management
Services Agreement with the Affiliated Orthodontist's
Orthodontic Affiliate. Pursuant to the Management Services
Agreement, the Company will receive a monthly management
fee for providing all of the Orthodontic Affiliate's
practice needs, including facilities, support staff and
supplies, as well as a program of systems, methods and
procedures designed to enhance the growth, efficiency and
profitability of the Orthodontic Affiliate.
Pursuant to the Affiliation Agreement, the Affiliated
Orthodontist will typically convert his existing
professional corporation into a general corporation that
will function as the MSO and create a new professional
corporation (the Orthodontic Affiliate) through which the
Affiliated Orthodontist will continue to provide
orthodontic care. The MSO will retain certain assets and
liabilities which will typically include the lease for the
Orthodontic Affiliate's office space, clinical supplies and
equipment and office furniture, supplies and equipment.
The Orthodontic Affiliate will retain certain other assets
and liabilities (if any) which will typically include all
cash and cash equivalents, real property, automobiles,
patient records, related patient information and notes
payable unrelated to assets purchased. The Company will
generally acquire all of the equity interest of the MSO
from the Affiliated Orthodontist, the purchase price for
which is determined through an assessment of immediate and
future return on investment. The MSO typically is acquired
for a combination of cash, five year notes and unregistered
Common Stock or stock options. The average MSO purchase
price is expected to be approximately $600,000, of which
the cash portion is expected to be approximately $200,000.
The Management Services Agreement provides that the
Orthodontic Affiliate will utilize the facility and the
Company's services for a period of 20 years, with two ten
year extensions. While each Management Services Agreement
will be negotiated based on specific circumstances, the
management fees charged will typically be 65% to 75% of the
Orthodontic Affiliate's gross income, which is expected to
be sufficient to pay all of the MSO's expenses and provide
a return on the Company's investment. If the Orthodontic
Affiliate's expenses payable by the MSO are less than an
agreed target amount of expenses, the difference between
the target amount and the actual expenses will typically be
shared equally by the MSO and the Orthodontic Affiliate.
At the retirement, disability or death of the Affiliated
Orthodontist, the Company will locate a replacement
Affiliated Orthodontist to purchase the Orthodontic
Affiliate and assume the Management Services Agreement.
Plan of Operations (Unaudited)
The Company's financial results to date relate to its
initial organization and establishment of infrastructure.
During this period, the Company provided management
consulting services to nine orthodontic practices on a fee
for services basis. The revenue and expenses during that
period are associated with the management consulting
services provided by the Company.
The unaudited financial statements of the Company for the
three and nine months ended September 30, 1997 reflect a
net loss of $266,866 and $3,599,331, respectively. The
comparative results for 1996 reflect the general and
administrative costs associated with the operations for the
Company for the period August 30, 1996 (inception) to
September 30, 1996. The net loss for the nine months ended
September 30, 1997 and the retained deficit at September
30, 1997 are primarily attributable to a non-recurring
consulting expense totaling approximately $2.9 million
related to stock and cash compensation paid to two
consultants in April 1997. The remainder of operating
expenses and retained deficit at September 30, 1997 relate
to the start-up of the Company, the provision of management
consulting services and the Company's initial public
offering.
Liquidity and Capital Resources
The Company has experienced net losses, negative cash
flows, a deficit in working capital and an accumulated
deficit since its inception. For the period from August
30, 1996 (inception) to September 30, 1997, the Company
incurred a net loss of $3,831,443. The Company reported a
significant loss from operations for the nine month period
ended September 30, 1997 due primarily to compensation
earned by two consultants in April 1997. At September 30,
1997, the Company had an accumulated deficit since
inception of $3,831,443 and a working capital deficit of
$2,859,156.
On October 6, 1997, the Company closed its initial public
offering pursuant to which the Company sold 2,070,000
shares of Common Stock and 2,070,000 Common Stock Purchase
Warrants. The Company received proceeds from the offering,
net of the underwriter discounts, fees and expenses, of
approximately $9.8 million. From the net proceeds, the
Company paid in full the notes payable used to finance
operations prior to the offering and paid the cash portion
of the affiliations with the Initial MSOs, resulting in
cash available after the offering and related expenses of
approximately $6 million.
The Company expects to affiliate with additional
orthodontic practices during 1997 that will involve the use
of cash, Common Stock and notes payable. Management
believes that the cash proceeds of the offering combined
with its cash flow from operations will be sufficient to
fund planned capital expenditures and ongoing operations of
the Company through the end of 1998. The Company is also
seeking to establish a revolving bank credit facility
which, when combined with the Company's cash resources,
will be used in the Company's planned affiliation program.
PART II - OTHER INFORMATION
ITEM 1. Legal Proceedings
None
ITEM 2. Changes in Securities
Not applicable
ITEM 3. Defaults upon Senior Securities
Not applicable
ITEM 4. Submission of Matters to a Vote of Security Holders
On September 29, 1997, by written consent of the
holders of a majority of the issued and outstanding
shares of Common Stock of the Company, the stockholders
consented to the Company's merger with and into four
management services organizations in connection with
the Company's affiliation with four of the seven
Initial Orthodontic Affiliates. The holders of
1,050,000 shares of the Common Stock voted in favor
of the four mergers. Written notice of the corporate
action by written consent of the holders of a
majority of the issued and outstanding shares of Common
Stock of the Company was sent to the stockholders who did
not consent in writing.
ITEM 5. Other Information
Not applicable
ITEM 6. Exhibit and Reports on Form 8-K
(a) Exhibit No.
(Reference to Item 601(b)
of Regulation S-B) Description
11 Statement re Computation of
Per Share Earnings
27 Financial Data Schedule
(furnished to the Securities and
Exchange Commission for Electronic
Data Gathering, Analysis and Retrieval
[EDGAR] purposes only)
(b) Reports on Form 8-K
There were no reports on Form 8-K filed during the quarter for which
this report is filed.
SIGNATURES
In accordance with the requirements of the Exchange Act, the
Registrant caused this report to be signed on its behalf by
the undersigned, thereunto duly authorized.
OMEGA ORTHODONTICS, INC.
(Registrant)
Date: November 17, 1997 By: /s/Robert J. Schulhof
Robert J. Schulhof
Chief Executive Officer
Date: November 17, 1997 By: /s/Edward M. Mulherin
Edward M. Mulherin
Chief Financial Officer
EXHIBIT INDEX
Exhibit
Number Description
11 Statement Re Computation of
Per Share Earnings
27 Financial Data Schedule
(furnished to the Securities and Exchange
Commission for Electronic Data Gathering,
Analysis, and Retrieval [EDGAR] purposes only)
Exhibit 11
Omega Orthodontics, Inc.
Statement Re Computation of Net Loss per Share
For the Period
Nine months Three months from August 30,
ended ended 1996 (inception)
September 30, September 30, to September 30,
1997 1996 1996
Common shares issued upon
incorporation 1,050,000 1,050,000 1,050,000
Common shares and common
shares equivalents issued
within 12 months of initial
public offering filing at
less than initial public
offering price per share 635,000 635,000 635,000
--------- --------- ---------
Shares used to compute
net loss per share 1,685,000 1,685,000 1,685,000
========= ========= =========
Net loss to common
stockholders $(3,599,331) $(266,866) $(16,387)
========= ========= =========
Net loss per share $(2.14) $(.16) $(.01)
========= ========= =========
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<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> SEP-30-1997
<CASH> 18,730
<SECURITIES> 0
<RECEIVABLES> 10,989
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 32,719
<PP&E> 12,637
<DEPRECIATION> 2,871
<TOTAL-ASSETS> 1,400,182
<CURRENT-LIABILITIES> 2,891,875
<BONDS> 0
0
0
<COMMON> 16,850
<OTHER-SE> (1,810,943)
<TOTAL-LIABILITY-AND-EQUITY> 1,400,182
<SALES> 55,284
<TOTAL-REVENUES> 55,284
<CGS> 0
<TOTAL-COSTS> 3,516,447
<OTHER-EXPENSES> 0
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