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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
AMENDMENT NO. 1
TO
FORM 10-SB
GENERAL FORM FOR REGISTRATION OF SECURITIES OF
SMALL BUSINESS ISSUERS
UNDER SECTION 12(B) OR (G) OF THE SECURITIES EXCHANGE ACT OF 1934
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U.S. MEDICAL GROUP, INC.
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(Name of Small Business Issuer in Its Charter)
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NEVADA IRS NO. 88-0320389
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(State or other jurisdiction of incorporation or (I.R.S. Employer Identification)
organization)
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1405 SOUTH ORANGE, ORLANDO, FLORIDA 32806
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(Address of principal executive offices)
407-849-2288
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(Company's telephone number including area code)
Securities to be registered under Section 12(b) of the Act:
Title of each class to be so registered: Name of each exchange on which each
class is to be registered
NONE NONE
Securities to be registered under Section 12(g) of the Act:
COMMON STOCK ($0.001 PAR VALUE)
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(Title of class)
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TABLE OF CONTENTS
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PAGE
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PART I....................................................................................................1
Item 1. Description of Business........................................................1
Item 2. Management's Discussion and Analysis of Financial
Conditions and Results of Operations..................................12
Item 3. Description of Property........................................................19
Item 4. Security Ownership of Certain Beneficial Owners
and Management........................................................19
Item 5. Directors, Executive Officers, Promoters and
Control Persons.......................................................20
Item 6. Executive Compensation.........................................................21
Item 7. Certain Relationships and Related Transactions.................................22
Item 8. Description of Securities......................................................23
PART II...................................................................................................28
Item 1. Market Price of and Dividends on the Registrant's Common
Equity and Other Shareholder Matters..................................28
Item 2. Legal Proceedings..............................................................29
Item 3. Changes in and Disagreements with Accountants..................................29
Item 4. Recent Sales of Unregistered Securities........................................29
Item 5. Indemnification of Directors and Officers......................................30
PART F/S - FINANCIAL STATEMENTS...........................................................................F-1
PART III - EXHIBITS......................................................................................
SIGNATURES................................................................................................
Index to Exhibits.........................................................................................
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PART I
ITEM 1. DESCRIPTION OF BUSINESS
GENERAL
U.S. Medical Group, Inc. (the "Company"), through its wholly-owned
subsidiary, U.S. Medical Group (Florida), Inc. ("USMGF"), provides surgical
operating rooms and required support staff (such as nurses and technicians) by
means of a mobile unit on site at correctional facilities (the "Business"). The
Company currently owns, manages and operates a free-standing, totally
self-contained, mobile surgical facility that serves the Florida prison system
in Northern Florida. A similar contract was awarded to the Company by the
Department of Corrections of the State of North Carolina which commenced October
15, 1999, for which the Company purchased a second mobile unit. The Company uses
mobile ambulatory surgical centers, built into tractor-trailer vehicles with
expandable side panels, to deliver cost-effective surgical services to
correctional facilities. While the military has used similar services to perform
surgical procedures during periods of war and other conflicts, the Company
believes that USMGF is the first to provide a mobile surgery unit on site at a
correctional facility for ambulatory surgical procedures. The service is
designed to reduce the costs of the correctional authority (by reducing or
eliminating the need for hospitals) and to enhance security as well as cost by
reducing or eliminating the need to transport inmates to off-site hospitals and
guard them during hospital stays.
Until April 1999, the Business was conducted by and under the name of
American Mobile Surgical Services, Inc., a Florida corporation ("AMSSI"). In
April 1999, pursuant to the terms of an Agreement and Plan of Merger entered
into as of March 31, 1999 by and among AMSSI, USMGF and the Company (the "Merger
Agreement), AMSSI became a subsidiary of U.S. Medical Group, Inc. when USMGF
merged (the "Merger") with AMSSI with AMSSI being the surviving corporation.
Following the merger AMSSI changed its name to USMGF. In connection with the
Merger, the Company issued to the AMSSI stockholders a total of 10,500,000
shares of the Company's common stock, $.001 par value (the "Common Stock"). In
addition, the AMSSI management assumed the management of the Company. See "Part
I. Item 5. Directors, Executive Officers, Promoters and Control Persons." The
reason for the Merger was primarily AMSSI's need to gain broader access to
additional capital markers in order to continue implementing and expanding its
business model.
In connection with the Merger, the Company issued to AMSSI stockholders
a total of 10,500,000 shares of the Company's common stock, $.001 par value (the
"Common Stock"), of which 9,450,000 shares were issued to AMSSI management. At
the time of the merger, U.S. Medical Group, Inc. was inactive and had no
material assets. AMSSI's principal asset was one (1) mobile surgical unit and
installed specialized medical equipment. Prior to the merger in April 1999: (i)
none of the AMSSI shareholders, officers or directors had any equity interest in
the Company; (ii) none of the AMSSI shareholders, officers, or directors were
officers or directors of the Company; (iii) none of the Company's shareholders,
officers or directors had any interest in AMSSI; and (iv) none of the Company's
shareholders, officers, or directors were officers or directors of AMSSI.
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The Company was incorporated under the laws of the State of Nevada
under the name of U.S. Medical Group, Inc. on April 25, 1994 as a wholly-owned
subsidiary of Best Equities Limited (the "Predecessor"). The Predecessor was
incorporated on April 4, 1985 under the laws of the Province of British
Columbia, Canada. In 1987, the Predecessor issued a total of 1,875,373 shares of
its common stock in a private placement to sophisticated investors in the
Province of British Columbia, Canada. On May 13, 1994, the shareholders of the
Predecessor exchanged all of the outstanding shares of common stock of the
Predecessor on a one-for-one basis for shares of common stock in the Company.
From the time of the Predecessor's incorporation until the Merger, neither the
Predecessor nor the Company engaged in any significant business activity other
than the search for acquisition opportunities, and in the three fiscal years
prior to the Merger, the Company did not have any significant assets or
liabilities.
In June 1999, USMGF purchased a Mobile Hyperbaric Chamber to be leased
to third parties. Hyperbaric oxygen provided by this unit involves a mode of
therapy in which the patient breathes 100% oxygen at pressures greater than
normal atmospheric (sea level) pressure.
The Company's business currently depends solely on its contracts with
the States of Florida and North Carolina and minimal revenues currently
generated by the Company's Mobile Hyperbaric Chamber.
AMSSI purchased its first mobile surgery unit in July 1999 for
$1,099,998 and spent an additional $425,782 on installed specialized equipment.
The source of funds for the purchase of the unit and equipment was the proceeds
from $1,655,000 of loans from a commercial bank. The unit was purchased from
Mobile Surgical International Corporation of Vermont. The unit is fully equipped
and comparable to any ambulatory surgical center. Pursuant to the Florida
Contract (as defined below in"-Markets"), the State contracts separately with
surgeons and anesthesiologists and USMGF supplies operating room facilities and
required support staff.
Major capital equipment in the unit includes:
-Anesthesia Machine
-Video Tower
-Monitor
-Camera
-Printer
-Light Source
-Printer
-VCR
-Shaver Motor
-Electric Operating Room Table
-Electrocautery Machine/Smoke Evacuator
-Full Size C-Arm w/Monitor
-Power Source for Electric Saw/Drill
-Head Light and Xerox Light Source
Also included is instrumentation to accommodate all specialties of
surgeries. The unit operates five days a week, 8 hours a day, with a permanent
staff of at least four. The Company
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purchased its second unit for use in North Carolina (with similar equipment) by
obtaining a loan in the amount of $2,200,000 with annual interest equal to the
LIBOR Market Index Rate plus 1.5% to be repaid over 4 years. The second unit
currently operates approximately 3 days a week, 10 hours a day with a permanent
staff of at least 4 persons. Each unit is driven by a driver who is an
independent contractor working on an as-needed basis. At this time, each unit is
located at one site only pursuant to the request of the states' Department of
Corrections, however, patients from other sites are transported to the Company's
units.
Typically, state departments of health or similar agencies require
medical facilities to be inspected and licensed as having met the minimum
established standards for that state. In Florida, where no standards were
previously established, USMGF was successful in lobbying for legislation which
was enacted to include mobile surgery units under contract with the Florida
Department of Corrections under the applicable State rules which govern
hospitals and free-standing surgery centers.
In North Carolina the Company's Mobile Surgery Unit is overseen by the
North Carolina Department of Corrections Hospital Administrator. The North
Carolina facility located in Raleigh, has a hospital on site. The
Company's Mobile Surgery Unit is an extension of the Central Prison hospital.
PRODUCTS AND SERVICES
Based upon the Company's experience to date, the following surgical
procedures can be carried out in a USMGF mobile unit:
- ORTHOPEDIC
- Knee Arthroscopy
- Knee Arthroscopy with Anterior Cruciate Ligament Repair
- Shoulder Arthroscopy
- Shoulder Arthroscopy with Open Repair
- Anterion Medialization
- Release of Trigger Finger
- Carpal Tunnel Release
- Open Reduction of Internal Fixation
- Dupuytren's Release
- Cubital Tunnel Release
- Carpal Matacarpal Arthrosplasty
- Excision of Mass
- Ganglion Cyst Removal
- Incision and Drainage of Extremities
- Tendon Transfer
- Achilles Tendon Repair
- PODIATRY
- Bunionectomy
- Removal of Toenail
- Plantar Fasiotomy
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- Excision of Hammertoe
- Excision of Neuroma
- Cauterization of Plantar Warts
- PAIN MANAGEMENT
- Epidural Block
- Epidural Block with Image
- Trigger Point Injection
- GENERAL SURGERY
- Hernia Repair (Inquinal, Ventral & Umbilical)
- Breast Biopsy
- Laparoscopic Cholecystectomy
- Mastecomy
- Upper Gastrointestinal Endoscopy
- Lower Gastrointestinal Endoscopy
- Hemorrhoidectomy
- Pilonidal Cystectomy
- Fissurectomy
- Excision of Tumors
- UROLOGY
- Cystoscopies
- Transurethral Resections
- Cauterization of Condyloma
- Prostate Biopsies
- Urethral Dilations
- Circumcisions
- Orchiectomy
- Hydrocelectomy
- PLASTIC SURGERY
- EAR NOSE AND THROAT
- Tonsillectomies
- Adenoidectomy
- Excision of Nasal Polyps
- Repair of Deviated Septum
- Correction of Nasal Deformities
- Caldwell-Luc Procedures
- Myringoplasty
- Tympanoplasties
- Stapecdectomy
- Myringotomy
- Mastoidectomy
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USMGF's historical experience from April 1997 to the present reflects
the following specialty break-down and case mix:
BREAKDOWN BY SPECIALTY
Podiatry 1
Ortho 17
Hand 5
Urology 19
ENT 8
General Surgery 50
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100%
CASE MIX
Miscellaneous 6
Wound Repair 3
Other Ortho 4
Hand 6
Hemorrhoidectomy 3
Ram Lesion 13
Cysto 16
Open Reduction 11
Knee Arthroscopy 12
Hernia Repair 26
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100%
In Florida, there are a total of 66,000 inmates incarcerated in
approximately 65 institutions managed in 5 regions. One third of the
institutions and approximately 35,000 inmates are in the North Florida area. The
North Florida Reception Center ("NFRC") operates a 150 bed facility caring for
medical, surgical and mental health patients. It is in the NFRC that USMGF has
the mobile surgical unit in operation. Commencing in 1999, the Florida
Department of Corrections began to transport elective surgical cases from the
South and Central districts to the NFRC so as to utilize the USMGF facility.
USMGF's monthly caseload is anticipated to increase to an average for the year
2000 of 100 cases per month as compared to 75 in 1999 due to an increase in the
types of services that are provided such as endoscopy and opthamology. Also, the
FDOC has indicated to the Company that it plans to send more patients to the
Company's mobile surgery unit from outlying facilities. The Company's agreement
with the State of Florida ends on September 30, 2000. USMGF requested in January
2000 that its contract be renewed for 3 years because management determined that
it would be in the best interest of USMGF to obtain a 3-year contract, rather
than 2 separate 1-year contracts in order to provide the Company with greater
stability of income. The State of Florida has an option to continue the service
for two additional one-year periods subject to current terms and renewal price
provisions included in the agreement.
In North Carolina, there are a total of 42,000 inmates incarcerated in
institutions throughout the state. Some of the inmates sentenced to a jail term
are also housed at North Carolina's Central Prison. Central Prison in Raleigh is
where USMGF has its Mobile Surgery Unit in service. The projected cases are
approximately 53 per month for the 1999/2000-contract year. The contract
encompasses all specialties of surgery. The surgeons and anesthesiologists are
contracted by Central Prison.
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In June 1999, USMGF purchased a Mobile Hyperbaric Chamber for lease to
a third party. The purchase price for the unit was $68,900 which was financed
with the proceeds from a bank loan. Approximately $87,500 was spent in upgrades
and repairs, bringing the Company's total investment in the Mobile Hyperbaric
Chamber to $152,000. In December 1999, the Company leased the unit to a medical
services company in Alabama. The unit was put into service in Wisconsin in late
January 2000. The unit is being leased for $3,000 per month and 25% of net
profits earned from use of the Unit.
The Mobile Hyperbaric Unit has a multi-placed chamber that can
accommodate up to 6 patients at a time. In contrast with attempts to force
oxygen into tissues by topical applications at levels only slightly higher than
atmospheric pressure, hyperbaric oxygen therapy involves the systemic delivery
of oxygen at levels 2-3 times greater than atmospheric pressure.
Oxygen is essential for maintaining cellular integrity, function, and
repair when tissues are injured. Oxygen not only plays an important role in
energy metabolism, but also is very important in polymorphonuclear cell
function, neovascularization, fibroblast proliferation, and collagen deposition.
Indications for Hyperbaric Referral
Standard of Care
Acute Severe Carbon Monoxide Poisoning
Cerebral Arterial Gas Embolism
Clostridial Myonecrosis
Decompression Sickness
Osteoradionecrosis
Adjunctive Therapy
Crush Injury; Compartment Syndrome
Exceptional Blood Loss Anemia
Necrotizing Soft Tissue Infections
Radiation Tissue Injury
Chronic Osteomyelitis
Thermal Burns
Treatment Protocol Oxygen, when breathed under increased atmospheric
pressure, is a potent drug. Besides the beneficial effects discussed above,
hyperbaric oxygen can produce noticeable toxic effects if administered
indiscriminately. Safe time limits have been established for hyperbaric oxygen
exposure, and these profiles form the basis for today's treatment protocols. It
is only quite recently that disease-specific hyperbaric oxygen dosing has been
introduced.
Emergency cases, such as carbon monoxide poisoning or cerebral arterial
gas embolism may only require one or two treatments. In those cases for which
angiogenesis is the primary goal, as many as 20 to 40 treatments may be
necessary. The precise number of treatments will often depend upon the clinical
response of each patient.
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With exception of decompression sickness and cerebral arterial gas
embolism, periods of exposure last approximately two hours. Treatments may be
given once, or twice or occasionally three times daily, and can be provided in
both, inpatient or outpatient settings.
A technician and physician trained in hyperbarics who are not employees
and are not otherwise engaged with the Company are in attendance at all times
when a patient is in the chamber. The Company has yet to generate any material
revenue from its leasing of its Mobile Hyperbaric Chamber.
MARKETS
CORRECTIONAL HEALTHCARE
In 1996, total annual inmate healthcare spending in the United States
was estimated to be between $3-$5 billion. (Source: Bureau of Justice
Statistics, State Prison expenditures for inmate medical care, fiscal year
1996). Approximately 30% of such spending is currently privatized and the
Company believes this percentage will continue to increase due to growing
acceptance and success of privatization, pressure on government to contain
taxes, tougher sentencing guidelines and the managed care trend in healthcare
delivery generally.
Typically, state departments of correction recruit in-house staff and
contract with local hospitals, physicians and dentists that provide medical and
dental services for inmates. Additional costs are frequently incurred by
correctional facilities as a result of correctional officers accompanying
inmates to and from hospital settings. For example, in Florida and in North
Carolina two officers generally have to accompany an inmate when he or she is
outside the correctional facility.
Correctional authorities are increasingly contracting with managed care
providers for services associated with providing health and dental care. One
such provider, Correctional Medical Services Inc. of St. Louis, Missouri,
("CMS"), a leading provider of health-care services to prisons and jails in the
U.S., claims to currently provide healthcare to approximately 269,000 inmates at
332 correctional facilities in 28 states. CMS is a subsidiary of Spectrum
Healthcare Services Company. CMS claims to provide healthcare coverage for one
of every seven inmates in the United States. CMS promotional literature states
that CMS correctional patients requiring surgery are transported to off-site
hospital facilities accompanied by correctional officers in correctional
vehicles. (Source: Internet Website of CMS.)
The Company believes that more state and local governments are
contracting with private inmate healthcare providers. There are approximately
1.8 million inmates currently incarcerated in the United States and this number
is projected to grow 8% per annum for the next several years. Approximately 60%
of inmates are housed in state prisons, 30% in local jails, and the remainder
are in federal prisons or under jail supervision. (Source: Department of Justice
and Bureau of Labor Statistics.)
In 1995, two percent of all state and federal inmates were held in 110
facilities operated by private contractors. (Source: U.S. Bureau of Justice.)
This included 81 privately-run community based facilities and 29 confinement
institutions. By 1998, this total had increased to
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170 facilities encompassing a capacity of 123,206 inmates. (Source: Private
Prisons Research Site of the University of Connecticut.)
PRISONS AND JAILS
Prisons generally hold inmates for terms of one year or longer
following formal sentencing as a result of felony offenses. Jails are facilities
that are more local in nature that hold persons for shorter period of times
including pre-trial and pre-sentencing periods.
At the end of 1995 (the last formal census data available), there were
a total of 1,375 state correctional facilities and 125 federal facilities. The
census excluded the approximately 3,300 locally operated jails and county or
municipal detention centers. State and federal facilities are located as
follows:
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State Federal
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North East 204 20
Mid-West 275 18
South 629 62
West 267 25
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Totals 1,375 125
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At year-end 1996, 5.5 million people were on probation, in jail or
prison, or on parole, approximately 2.8 percent of all U.S. adult residents. At
year-end 1997, state prisons on average were operating at between 15% and 24%
above capacity, while Federal prisons were operating at 19% above capacity. At
mid-year 1998, state and federal prison authorities had under their jurisdiction
1,277,866 inmates of which 1,210,034 were physically in their custody. Also at
mid-year 1998, local jails held or supervised 664,847 persons awaiting trial or
serving their sentence. (Source: Bureau of Justice Statistics, U.S. Department
of Justice.)
The Company believes that one of the primary reasons that inmate
population is growing is that more inmates are being required to serve out
greater percentages of their sentenced terms than what they served in the past.
Included in the overall totals are the following states with inmate
populations exceeding 10,000 persons:
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STATE NUMBER OF INMATES NUMBER OF FACILITIES
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Alabama 22,501 12
Arizona 24,879 9
California 158,742 24
Connecticut 17,437 20
Florida 66,280 38
Georgia 38,194 32
Illinois 42,140 20
Indiana 18,552 15
Kentucky 15,107 13
Louisiana 30,907 11
Maryland 22,566 12
Massachusetts 11,867 11
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Michigan 44,501 47
Missouri 25,118 11
New Jersey 29,724 11
New York 70,723 46
North Carolina 32,407 89
Ohio 49,289 19
Oklahoma 20,994 12
Pennsylvania 35,644 19
South Carolina 21,530 29
Tennessee 17,656 5
Texas 143,299 32
Virginia 28,681 17
Wisconsin 17,316 21
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Inmate population numbers are from a May 1998 Corrections Compendium
publication updated to reflect Bureau of Justice statistical data from March
1999.
STATE CORRECTIONAL ORGANIZATIONS
The Company is currently operating only in Florida, North Carolina and
Wisconsin. USMGF's current contract (the "Florida Contract") with the Florida
Department of Corrections (the "FDOC") to provide Mobile surgical services
became effective on November 12, 1997 and will terminate on September 30, 2000.
The Florida Contract may be renewed, at FDOC's option, for two additional
one-year periods after the initial period upon the same terms and at the renewal
prices listed in the Florida Contract. The Company, however, has requested that
its contract be renewed for a three year term. See "-Products and Services."
The Florida Contract provides that USMGF will provide on-site surgical
services for FDOC pursuant to applicable State and regulatory requirements.
Compensation by the FDOC is provided on a fee for service basis. A fee schedule
has been provided with the Contract to designate the appropriate fee for each
procedure. An invoice is submitted to the FDOC on a weekly basis by USMGF. Any
procedure performed after the initial fifty (50) in each month is billed at a
10% discount.
USMGF's contract with the North Carolina Department of Corrections
("NDOC") is for one year and may be renewed by the NDOC at its option for four
one-year periods. The contract became effective in North Carolina on October 15,
1999. On May 6, 1999, the North Carolina Department of Corrections ("NDOC")
awarded USMGF a contract to provide mobile surgical services at Central Prison
in Raleigh. The contract began on October 15, 1999 and is effective through
October 14, 2000. The contract may be renewed by the NCDOC for four (4) one (1)
year periods. Compensation of $1,512,720 per year is paid in twelve payments of
$126,000. USMGF is required to provide an invoice by the 15th of each month for
the services performed in the prior month.
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Under the Florida and North Carolina contracts, USMGF provides: a
mobile surgical unit including all required equipment, instrumentation, and
supplies, and the staff as designated in the Florida and North Carolina
Contracts (including one Operating Room Coordinator/Circulator, one Surgical
Technician, one Recovery Room Registered Nurse, and one patient care
technician). The respective states provide a Registered Nurse in the pre-op area
who has knowledge of the policies and procedures of the Department of
Corrections.
The State of Florida's performance and obligation to pay under the
Florida Contract is contingent upon an annual appropriation by the Florida
Legislature. The Company fee schedule is substantially below customary hospital
charges thereby generating significant savings for the State of Florida in
facility fees, security related costs, and transportation costs. The Florida
Contract may be terminated by either party upon no less than 30 calendar days
notice, without cause, unless a lesser time is mutually agreed upon by both
parties. In the event funds to finance the Florida Contract become unavailable,
or in the event of a breach of contract by USMGF, the FDOC may terminate the
Florida Contract upon no less than 24 hours written notice.
On May 6, 1999, NDOC notified USMGF that it had been awarded the
contract regarding mobile operating room services to be provided by USMGF. The
contract was issued for the base period commencing October 15, 1999 continuing
through June 30, 2000. Pursuant to the agreement between USMGF and NDOC, USMGF
provides NDOC with a "State of the Art" fully mobile, operating room truck with
the specifications set forth in the agreement (the "NDOC Contract"). NDOC is
entitled to extend the NDOC Contract for an additional period of four years in
one-year increments.
In the event NDOC determines that USMGF is not satisfactorily
performing the NDOC contract, NDOC may, by giving 30 days written notice, demand
satisfactory performance. If USMGF fails to perform within 30 days of receiving
that notice, NDOC may terminate all or part of the NDOC Contract. NDOC is also
entitled to terminate the NDOC Contract at any time, with or without cause, by
giving 30 days written notice to USMGF. In addition, the NDOC Contract will be
automatically terminated if funds cease to be available.
The Company has agreed to pay a third party 5% of net profits received
by the Company from its operations in North Carolina as a fee for assisting
USMGF to obtain the North Carolina contract. This agreement is effective for the
length of the initial contract as well as any renewed contract thereafter. There
are no affiliations between and among the entities and management of the third
party and USMGF. The third party is an independent consultant hired by the
Company.
The Company has learned that the California Department of Corrections
is considering the solicitation of bids for mobile surgical services similar to
those the Company currently provides. To provide a comparable level of service
under a California contract, as is carried out in Florida and North Carolina,
the Company would require three additional mobile units. The Company plans to
bid on the California contract when the California Department of Corrections
issues a Request For Proposals.
Contracts with governmental agencies are generally obtained through a
competitive bidding process, which is governed by applicable state and local
statutes and ordinances. Although practices and procedures vary, typically a
formal request for proposal ("RFP") is issued stating the scope of work to be
performed, length of contract, performance bonding
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requirements, minimum qualifications of bidders, selection criteria and the
format to be followed in the bid or proposal. Usually, a committee appointed by
the governmental agency reviews bids and makes an award determination. The
committee may award the contract to a particular bidder or decide not to award
the contract to the private sector. The award of a contract may be subject to
formal or informal protest, through a governmental appeals process, by
unsuccessful bidders.
A successful bidder must often agree to comply with numerous additional
requirements regarding record-keeping and accounting, non-discrimination in the
hiring of personnel, safety, safeguarding classified information, management and
other matters. Upon a violation of the terms of an applicable contractual or
statutory provision, a contractor may be debarred or suspended from obtaining
future contracts for specified periods of time in the applicable location.
The Company's operations are subject to the same laws, regulations and
rules regarding inspections and licensing that govern hospitals and free
standing surgical centers. The Company is also subject to the same laws,
regulations and rules regarding medical waste disposal of sharp material and
sterilization practices.
COMPETITION
The Company is aware of three other companies that have attempted to
enter the corrections mobile surgical marketplace.
- Vantage Surgical, Incorporated is a for-profit business
offering information regarding out patient, acute mobile
medical/surgical facilities with headquarters located in
Hanford, California. The Company understands that Vantage was
previously licensed to operate in California as a mobile
surgical unit but such license has expired. Vantage used a
vehicle similar to that operated by USMGF. Vantage literature
states that they are "the nation's first fully licensed mobile
ambulatory surgical center." To the Company's knowledge, there
are no active and direct competitors in the corrections mobile
surgical marketplace. Vantage has not as yet contracted for
provision of any mobile services with any correctional
institution. In April 1998, Vantage announced that Mobile
Surgical Unit, Incorporated of San Diego, had merged with
them. USMGF understands that Vantage does not currently have
any valid licenses in place.
- Mobile Surgical Unit, Incorporated is located in San Diego,
California, and merged with Vantage Surgical in 1998. To the
Company's knowledge, this organization does not advertise or
promote its business concept.
- Mobile Medical Surgical Services, Inc. is the California
subsidiary of Mobile Medical International, Inc., the provider
of the original mobile surgical unit that USMGF purchased.
Their units are manufactured by U.S. Trailer, Inc. in New
Hudson, Michigan. USMGF maintains an ongoing positive
relationship with MMSS, even though it is attempting to become
a competitor.
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STRATEGY
The Company's management believes that it has established a cost
effective and proven concept for the utilization of its equipment and services
in Florida and North Carolina and intends to expand its operations to other
states, to other target and emerging growth markets and to add to its services
capabilities by searching out new niche markets. The Company plans to expand its
services capabilities, beyond mobile surgery and mobile hyperbarics, into
additional markets which have potential for mobility, such as dentistry,
mammography endoscopy and opthamology. It is also seeking other markets in which
the Company can utilize its expertise, such as hospital construction.
The Company's initial product offering, the mobile, fully equipped
surgical center, has proven its cost saving capability with the Florida State
Department of Corrections. The use of mobile surgical units commenced in October
1999 in North Carolina and is planned for introduction to other state
authorities and to managed healthcare providers that have correctional facility
contracts. USMGF is seeking to expand its products and services to include the
provision of full dental services including oral surgeries not requiring
anesthesia.
The Company plans to establish local offices with regional managers for
states in which new operations commence.
The Company's pricing policy has been on the basis of a discount from
traditional healthcare costing formulas such as Medicare. Additional discounts
may be given where monthly case loads exceed certain pre-determined levels.
Services utilizing the proposed mobile dental unit would be priced on a similar
discount basis to standard rate structures.
The Company's primary marketing focus involves identifying and
developing business opportunities with correctional facilities that are not
sufficiently close to adequate surgical centers and that have infirmaries large
enough to handle post-op patients. USMGF has actively commenced a program of
correctional industry journal advertising and attendance at all key industry
trade shows.
EMPLOYEES
The Company presently has 12 full time employees and 2 part time
employees.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION:
This document includes forward-looking statements. All statements other
than statements of historical fact included in this document, including, without
limitation, the statements under "Management's Discussion and Analysis of
Financial Condition and Results of Operations" and "Liquidity and Sources of
Capital" regarding the Company's strategies, plans, objectives, expectations,
and future operating results are forward-looking statements. Although the
Company believes that the expectations reflected in such forward-looking
statements are reasonable at this time, it can give no assurance that such
expectations will prove to have been correct. Actual results could differ
materially
12
<PAGE>
based upon a number of factors including, but not limited to, the state of the
economy, competition, unanticipated business opportunities, availability of
financing, market acceptance, government regulation, dependence on key
personnel, limited public market and liquidity, shares eligible for future sale,
continuation and renewal of the Florida and North Carolina contracts and other
risks that may apply to the Company.
The following is a discussion of the financial condition and results of
operations of the Company as of the date of this Registration Statement. This
discussion and analysis should be read in conjunction with the accompanying
audited Consolidated Financial Statements of the Company including the Notes
thereto which are included elsewhere in this Form 10-SB.
GENERAL
The Company provides mobile surgical operating rooms and required
support staff (such as nurses and technicians) by means of a mobile surgical
unit on site at correctional facilities in Florida and North Carolina.
TWELVE MONTHS ENDED DECEMBER 31, 1999 COMPARED TO TWELVE MONTHS ENDED
DECEMBER 1998
REVENUE
For the year ended December 31, 1999, revenues from continuing
operations, which are comprised exclusively of patient fees, was $2,041,034.
Total revenues from continuing operations increased by $386,016, or 23.3%, from
$1,655,018 for the year ended December 31, 1998. The primary reason for the
increase was the establishment of the Company's second mobile surgical unit in
North Carolina. The unit began operating in September 1999 and had revenues of
$394,645, or 78.9% of the increase in revenues for 1999. The Company reported
net income from continuing operations before income taxes of $616,134 in 1999
compared to net income of $705,915 in 1998. Until April 1999, AMSSI elected to
be taxed under provisions of Subchapter S of the Internal Revenue Code. As a
result, AMSSI's earnings in 1998 and through April 1999 were taxed for federal
income tax purposes directly to the shareholders of AMSSI. Under those
provisions, AMSSI did not pay federal and state corporate income taxes on its
taxable income. In April, 1999, AMSSI ceased operating as an S Corporation and
became subject to federal and state income taxes. As a result, USMGF's net
income after taxes for the year ended December 31, 1999 was $233,475.
COSTS AND EXPENSES
The Company's expenses from operations for the year ended December 31,
1999 increased $475,797, or 50.1% to $1,424,900 from $949,103 during the same
period in 1998. Selling, general and administrative expenses increased $472,385,
or 68.5% to $1,161,335 in 1999 from $688,950 in 1998. The increase is due to the
Company employing 3 additional employees during 1999 as compared to
13
<PAGE>
1998 and establishing a new mobile surgical center in North Carolina during the
last six months of 1999. The start-up costs incurred in connection with
establishing the new unit were as follows:
<TABLE>
<S> <C>
- Personnel.........................................$50,672
- Medical supplies and equipment.................... 49,278
- Meeting and convention............................ 14,772
- Professional fees................................. 6,800
</TABLE>
While the start-up costs and expenses of opening the Company's mobile
medical facility have decreased the Company's working capital in 1999, the
Company's management does not believe this trend will have a material impact on
the Company's short-term or long-term liquidity. Management expects to fund this
decrease in liquidity through the proceeds of loans from commercial banks,
significant shareholders, and internally generated funds. Management believes
revenues and income from continuing operations will not be materially impacted
by the start-up costs of opening the second mobile medical facility in North
Carolina.
As the Company continues to expand, the Company will incur additional
costs for personnel. In order for the Company to attract and retain quality
personnel, the Company anticipates it will continue to grant options to current
and future employees to purchase the Company's common stock. The Company intends
to grant options what will not have a material adverse impact on the Company's
future results of earnings.
Depreciation and amortization expense for 1999 was $182,003, an
increase of $20,624 from $161,379 in 1998. The Company began operating its North
Carolina surgical facility during the last six months of 1999, and accordingly,
began depreciating the assets acquired for the facility.
Interest expense for the year ended December 31, 1999 was $81,562, an
decrease of $17,212, or 17.4% from $98,774 in 1998. The decrease in interest
expense is due to the Company reducing its bank debts during 1999. While the
Company incurred additional bank debt of $2,190,000 to fund the acquisition of
the new surgical unit in North Carolina, the new financing was not in place
until the last quarter of 1999. As a result, the interest expense in 1999
decreased from the previous year.
The Company's statement of operations for the years ended December 31,
1998 reflects no provision for income taxes. As an S Corporation, the Company's
14
<PAGE>
earnings were taxed, with certain exceptions, for federal income tax purposes
directly to the Company's shareholders. The Company terminated its S Corporation
tax status in April 1999.
LIQUIDITY AND CAPITAL RESOURCES
15
<PAGE>
As of December 31, 1999, the Company had a working capital deficit of
$425,543 compared to a deficit of $380,797 at December 31, 1998, an increase in
the deficit of $44,746. The decrease in working capital was substantially due to
the Company's dependence on short term debt and the current maturities of
long-term debt of $801,602 which has historically been funded from the Company's
cash flow from operations. In addition, the Company experienced an increase in
accounts payable of $89,258 and an increase in current and deferred income taxes
payable of $81,406.
The increase in accounts payable is due to the Company opening its
second mobile medical facility in Raleigh, North Carolina in September, 1999 and
the increase in income taxes is a result of the Company terminating its S
Corporation status in April 1999.
While the Company has raised capital to meet its current and projected
working capital and equipment financing needs, additional financing will be
required in order to acquire additional surgical facilities. The Company is
seeking financing in the form of equity and debt in order to provide for these
expansions and for working capital. There are no assurances the Company will be
successful in raising the funds required.
The Company has borrowed funds from significant shareholders of the
Company in the past to satisfy certain obligations. In addition, all of the
Company's bank debt is guaranteed by Company officers and significant
shareholders.
The Company generated cash flow from operations of $611,725 for the
year ended December 31, 1999 and $776,834 for the year ended December 31, 1998.
Cash flow from operating activities for the year ended December 31, 1999 is
primarily attributable to the Company's net income from operations of $233,475,
adjusted for depreciation of $182,003, deferred taxes of $313,362 and common
stock issued for services of $57,500. Cash flow from operating activities for
the year ended December 31, 1998 is primarily attributable to the Company's net
income from operations of $705,915, adjusted for depreciation of $161,379.
Cash flows used in investing activities was $2,121,403 during the year
ended December 31, 1999 and $49,006 for the year ended December 31, 1998. During
1999, the Company invested $1,900,239 in the North Carolina mobile surgical
facility. During 1998, the Company invested $49,006 in surgical equipment in its
Florida facility.
Cash flow provided from financing activities was $1,483,256 during the
year ended December 31, 1999 and cash flows used in financing activities during
the year ended December 31, 1998 was $829,206. The principal source of financing
in 1999 was the receipt of a $2,190,000 bank loan, the proceeds of which were
utilized to acquire the North Carolina mobile surgical unit and related medical
equipment. In addition, during 1999, the Company repaid $682,488 of bank loans
and $89,256 of loans to Company shareholders. The principal use of funds in 1998
were the repayment of loans from banks in the amount of
16
<PAGE>
$723,485 and $145,721 of loans from Company shareholders.
On January 25, 2000, the Company, through its wholly owned subsidiary,
declared a dividend payable to the shareholders of record on the date of
termination of the S-Corporation tax status. The dividend of $441,700 is
approximately equal to the taxable income of USMGF from its inception through
termination of its S-Corporation tax status. The distribution was financed by
unsecured demand loans from significant shareholders at 8.5% interest payable
annually, and will be repaid from operations as cash flow permits. The Company's
management believes the debt service arising from the issuance of these notes
will not have a material impact on the Company's financial condition or results
of operations.
17
<PAGE>
The Company plans to continue to develop new sites for its mobile
surgical units and to introduce mobile dental and hyperbaric units in the near
future, placing one or more units in service by year-end. The Company plans to
obtain financing for these units through bank loans, private placements of its
securities, and equity financing through offerings in the secondary markets.
There can be no assurance that management will be successful in its efforts to
obtain the financing necessary to fund the Company's growth or that contracts
for future sites will be obtained.
The effect of inflaction on the Company's revenue and operating results
was not significant. The Company's operations are in the southeastern United
States and there are no seasonal aspects that would have a material adverse
effect on the Company's financial condition or results of operations.
OUTSTANDING OPTIONS
On April 20, 1999 the Company granted options to purchase 100,000
shares common stock of the Company to Ms. Rhonda Ahern, the Company's purchasing
coordinator and surgical technologist, at an exercise price of $.10 per share.
The options vest at a rate of 20,000 shares per year over 5 years commencing
June 1, 2000. The Company's management believes the exercise of these options
will not have a material adverse impact on the Company's income from continuing
operations.
RECENT ACCOUNTING PRONOUNCEMENTS
During 1997, the Company adopted the disclosure requirements under
Statement of Financial Accounting Standards No. 123 (SFAS No. 123) Accounting
for Stock-Based Compensation. See Note 1 in the Consolidated Financial
Statements of the Company, included in this Report on Form 10-SB, for the full
disclosure. In 1997, the Company was required to adopt Statement of Financial
Accounting Standards No. 121 (SFAS No. 121) Accounting for the Impairment of
Long-Lived Assets and for Long-Lived Assets to be Disposed, which prescribes
accounting and reporting standards when circumstances indicate that the carrying
amount of a long-lived asset may be not recoverable. SFAS No. 121 had no impact
on the Company's financial statements.
The Company adopted Statement of Financial Accounting Standards No.
131, Disclosures about Segments of an Enterprise and Related information ("SFAS
131") in the year ended December 31, 1998. SFAS established standards for
reporting information regarding operating segments in annual financial
statements and requires selected information for those segments to be presented
in interim financial reports issued to stockholders. SFAS 131 also established
standards for related disclosures about products and services and geographic
areas. Operating segments are identified as components of an enterprise about
which separate discrete financial information is available for evaluation by the
chief operating decision maker, or decision making group, in making decisions
how to allocate resources and assess performance. The information disclosed
herein, materially represents all of the financial information related to the
Company's principal operating segment.
18
<PAGE>
The Company adopted Statement of Financial Accounting Standards No.
132, Employers' Disclosures about Pension and Other Post Employment Benefits
("SFAS 132") in the year ended December 31, 1999. SFAS No. 132 established
disclosure requirements regarding pension and post employment obligations. SFAS
No. 132 does not effect the Company as of December 31, 1999.
In March 1998, Statement of Position No. 98-1 was issued, which
specifies the appropriate accounting for costs incurred to develop or obtain
computer software for internal use. The new pronouncement provides guidance on
which costs should be capitalized, and over what period such costs should be
amortized and what disclosures should be made regarding such costs. This
pronouncement is effective for fiscal years beginning after December 15, 1998,
but earlier application is acceptable. Previously capitalized costs will not be
adjusted. The Company believes that it is already in substantial compliance with
the accounting requirements as set forth in this new pronouncement, and
therefore believes that adoption will not have a material effect on financial
condition or operating results.
In April 1998, Statement of Position No. 98-5 was issued which requires
that companies expense defined previously capitalized start-up costs including
organization costs and expense future start-up costs as incurred. Adoption of
this statement does not have an effect on financial condition or operating
results.
The Company adopted Statement of Financial Standards No. 133,
Accounting for Derivative Instruments and for Hedging Activities ("SFAS No.
133") in the year ended December 31, 1999. SFAS No. 133 requires that certain
derivative instruments be recognized in balance sheets at fair value and for
changes in fair value to be recognized in operations. Additional guidance is
also provided to determine when hedge accounting treatment is appropriate
whereby hedging gains and losses are offset by losses and gains related directly
to the hedged item. SFAS No. 133's impact on the Company's consolidated
financial statements is not expected to be material as the Company has not
historically used derivative and hedge instruments.
ITEM 3. DESCRIPTION OF PROPERTY
The Company's corporate headquarters and executive offices are located
at 1405 South Orange Avenue, Suite 601, Orlando, Florida 32806.
The Company requires only a nominal amount of space to conduct its
operations because most of its business activity is conducted in its mobile
units. The Company occupies approximately 800 square feet in the offices of Tom
Winters, MD pursuant to a month-to-month agreement which may be terminated upon
30 days written notice by either party. The agreement also provides for use of
all common areas, parking and the use of miscellaneous office equipment. The
Company leases this space for an amount of $2,244.00 per month.
ITEM 4. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information regarding the
beneficial ownership of the stock of the Company as of April 12, 2000, by
each shareholder who is known by the
19
<PAGE>
Company to beneficially own more than five percent (5%) of the outstanding
Common Stock, by each Director and by all executive Officers and Directors as a
group. No shares of Preferred Stock have been issued or are outstanding.
<TABLE>
<CAPTION>
AMOUNT AND NATURE
NAME AND ADDRESS OF BENEFICIAL OWNERSHIP(1) PERCENT OF CLASS
<S> <C> <C>
Dr. Thomas Winters 5,250,000 38.67%
1405 S. Orange Avenue, Suite 601
Orlando, Florida 32806
Richard Langley 2,100,000 15.47%
1405 S. Orange Avenue, Suite 601
Orlando, Florida 32806
Sandra L. Thompson 1,365,000 10.06%
1405 S. Orange Avenue, Suite 601
Orlando, Florida 32806
Daniel Williams 735,000 5.4%
1405 S. Orange Avenue, Suite 601
Orlando, Florida 32806
TOTAL OFFICERS AND DIRECTORS AS A GROUP (3 PERSONS) 8,715,000 64.2%
</TABLE>
-----------------------------
(1) All shares of the Company held by the above-referenced shareholders
are subject to the terms of a Lock-up Agreement pursuant to which such
shares may not be sold or transferred until June 1, 2000.
ITEM 5. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS
The Officers and Directors of the Company as of April 12, 2000 are
as follows:
<TABLE>
<CAPTION>
NAME AGE POSITION
<S> <C> <C>
Thomas F. Winters, Jr., M.D. 47 Chairman of the Board and
Chief Executive Officer
Richard H. Langley 66 Director and President
Sandra L. Thompson 55 Director, Treasurer, Chief Operating
Officer and Secretary
</TABLE>
20
<PAGE>
Dr. Thomas Winters has served as the Chairman and CEO of AMSSI since
April 1997, as its President from January 1996 to March 1999 and as Chairman and
CEO of the Company since March 31, 1999. From August 1986 to January 1996 Mr.
Winters was a partner with Matthews Orthopedic in Orlando, Florida. Dr. Winters
graduated from Brown University and thereafter in 1980 received his medical
degree from the University of Connecticut. He has completed fellowships in
Trauma, Sports Medicine and Adult Reconstructive Surgery at the Brigham and
Women's Hospital of Harvard Medical School. He has worked in free-standing
surgery centers since the late 1980's and was instrumental in the start-up of
such a surgery center in Orlando, Florida prior to the formation of USMGF.
Richard Langley has served as a Director and the President of the
Company since March 31, 1999 and as Director and Vice President of AMSSI since
January 13, 1997. From 1964 to the present, Mr. Langley has bought, sold and
developed residential properties, grown citrus crops and operated a cattle
ranch. From 1992 to 1995 he served as the District School Board Attorney in Lake
County, Florida. Mr. Langley is a University of Florida graduate with B.S.,
L.L.B. and Juris Doctor degrees and has maintained a legal practice in
Claremont, Florida since graduation in 1964. Mr. Langley has 22 years of public
service experience. He was elected to the Florida House of Representatives in
1972 and re-elected in 1974 and 1976. In 1980, he was elected to the Florida
Senate. He served as Minority Whip in the House and as Republican Whip and
Republican Leader in the Senate.
Sandra Thompson has served as a Director, Treasurer and Secretary of
the Company since March 31, 1999 and as Director, Treasurer and Secretary of
USMGF since January 13, 1997. From 1992 to 1997, Ms. Thompson was the Director
of Nursing of the Orlando Center for Outpatient Surgery in Orlando, Florida
where she coordinated all nursing functions for the Center. She has worked as a
Registered Nurse in a number of Florida hospitals and held positions of Staff
Nurse and Operating Room Supervisor. She has designed pre-op and post-op
facilities for a Florida hospital and was Educational Coordinator at the Same
Day Surgery Center in Orlando. Prior to the founding of USMGF, Ms. Thompson was
Director of Nursing and Risk Manager for four years, commencing in 1993, at the
Orlando Center for Outpatient Surgery. Ms. Thompson is a 1980 Valencia Community
College graduate and received her Licensed Healthcare Risk Manager license from
the University of Central Florida.
ITEM 6. EXECUTIVE COMPENSATION
No compensation in excess of $100,000 was awarded to, earned by, or
paid to any executive Officer or Director of the Company during the fiscal years
ended December 31, 1999, 1998 and 1997. The Company's Directors have not
received any other remuneration for serving as directors. The following tables
describe the compensation of the Company's Chief Executive Officer and President
for the last three fiscal years.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
ANNUAL COMPENSATION
OTHER ANNUAL
NAME AND PRINCIPAL POSITION YEAR SALARY ($) BONUS ($) COMPENSATION ($)
- --------------------------- ---- ---------- --------- ----------------
<S> <C> <C> <C> <C>
Thomas Winters, M.D. 1999 $ 0 $ 0 $ 0
Chief Executive Officer
</TABLE>
21
<PAGE>
<TABLE>
<S> <C> <C> <C> <C>
1998 $ 0 $ 0 $ 0
1997 $ 0 $ 0 $ 0
Mike M. Mustafoglu (1) 1999 $ 0 $ 0 $ 0
President
1998 $ 0 $ 0 $ 0
1997 $ 0 $ 0 $ 0
</TABLE>
- -----------------------------
(1) Mr. Mustafoglu was President and a director of the Company from October
1995 to March 1999.
LONG TERM COMPENSATION(*)
<TABLE>
<CAPTION>
SECURITIES
ALL OTHER NAMES AND RESTRICTED UNDERLYING
COMPENSATION STOCK OPTIONS/
PRINCIPAL POSITION YEAR AWARD(S)($) SARS($) LTIP PAYOUTS($)
<S> <C> <C> <C> <C>
Thomas Winters, M.D.(1) Chief Executive 1999 -- -- --
Officer
1998 -- -- --
1997 -- -- --
Mike M. Mustafoglu President 1999 -- -- --
1998 -- -- --
1997 -- -- --
</TABLE>
- ------------------------------
(*) The Company currently does not have an Incentive Stock Option Plan or
Non-Qualified Stock Option Plan. The Company is considering adopting such Plans
at a future date. The Company has agreed to grant options to purchase 100,000
shares of common stock of the Company to Ms. Rhonda Ahern the Company's
purchasing coordinator and a surgical technologist exercisable at a price of
$.10 per share and vesting at a rate of 20,000 shares per year over 5 years
commencing June 2000.
ITEM 7. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
In April 1999, the Company entered into a Consulting Agreement with
TransGlobal Financial Corporation ("TFC") pursuant to which TFC agreed to
provide certain consulting, advisory and other services to the Company. Other
services include strategic planning services and assisting in identifying,
evaluating and structuring mergers and acquisitions, consolidations, joint
ventures, strategic alliances and fundraising. The Company engaged TFC to
provide such services on an exclusive basis during the three-year period ending
April 25, 2002, provided, however, that the term of the agreement will be
renewed automatically in 12-month increments unless either party notifies the
other 90 days prior to the expiration of the term of the cancellation of the
agreement. Mr. Mike Mustafoglu is the President of TFC.
The agreement provides that TFC waive its retainer fee because the
Company issued TFC 575,000 shares of Common Stock for its services in connection
with the AMSSI acquisition. TFC subsequently transferred 287,500 of such shares
to Richard Langley, Jr. (the son of Richard H. Langley who is a Director and the
President of the Company) in consideration of services rendered with respect to
the merger of USMGF and AMSSI.
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<PAGE>
With respect to transaction fees, the agreement provides that:
(i) for financing from sources identified by TFC the
Company will pay TFC a seven percent (7%) fee for equity
financing and a three and one-half percent (3.5%) fee for debt
financing of any and all funds from such transactions that are
committed and available to the Company;
(ii) in the event that TFC represents the Company with
respect to a merger, acquisition, investment, exchange, or
other securities or assets transaction of the Company, then
the Company will pay TFC a fee equal to ten percent (10%) of
the total market value on the day of the closing of stock,
cash, assets and all other property (real or personal)
exchanged or received, directly or indirectly, by the Company,
or any of its security holders, in connection with any such
transaction; and
(iii) in the event TFC introduces the Company to a joint
venture partner or customer and sales develop as a result of
the introduction, the Company will pay a fee of two percent of
the net sales revenue generated directly from this
introduction.
To date, TFC has provided general financial advisory services to the
Company pursuant to the Consulting Agreement. Such services have included
financial planning and review, business plan development, identification of
financing sources and evaluation of strategic partner opportunities. TFC has
informed the Company that it does not engage in the business of buying and
selling securities for others or for its own account or advising others, for
compensation, as to the value of securities or the advisability of investing in,
purchasing or selling, securities. TFC has further informed the Company that it
is not currently licensed as a broker-dealer or investment advisor and that TFC
is not required to be so licensed to perform the activities called for under the
Consulting Agreement. TFC has agreed with the Company that if any such
activities are required to be performed by a licensed broker-dealer or
investment advisor, TFC will take the appropriate steps to obtain such licenses
or will inform the Company that it must retain a licensed broker-dealer or
investment company, as appropriate, to perform such activities.
ITEM 8. DESCRIPTION OF SECURITIES
GENERAL
Holders of the Company's Common Stock are entitled to one vote for each
share held of record on all matters submitted to a vote of the security holders.
There are currently 100,000,000 shares of common stock authorized of which
13,575,280 shares are issued and outstanding. Subject to preferences that may be
applicable to any then outstanding Preferred Stock, holders of Common Stock are
entitled to receive ratably such dividends as may be declared by the Board of
Directors out of funds legally available therefor. There are currently
20,000,000 shares of Preferred Stock authorized, none of which are issued and
outstanding. In the event of a liquidation, dissolution or winding up of the
Company, holders of Common Stock are entitled to share ratably in all assets
remaining after payment of liabilities and the liquidation preference of any
other securities. The Common Stock has no preemptive or other subscription
rights. There are no redemption or sinking fund provisions applicable to the
Common Stock. All outstanding
23
<PAGE>
shares of Common Stock are duly authorized. The Company's Transfer Agent is
Pacific Stock Transfer.
SHAREHOLDER RIGHTS PLAN
Under the terms of the Merger Agreement, the Company is obligated to
declare a dividend distribution of one Right for each outstanding share of the
Company's Common Stock to shareholders of record at the close of business on a
record date to be set by the Board of Directors (the "Record Date"). The terms
of such Rights are summarized in an exhibit to the Merger Agreement and are
described below. Each Right entitles the registered holder to purchase from the
Company one unit (a "Unit"), consisting initially of one share of Common Stock,
at a Purchase Price of $50.00 in cash per Unit, subject to adjustment. The
Company will enter into a Rights Agreement (the "Rights Agreement") with Pacific
Stock Transfer Company, as Rights Agent, as soon as practicable, substantially
upon the terms described below.
The Rights will be attached to all Common Stock certificates
representing outstanding shares, and no separate Rights Certificates will be
distributed. The Rights will separate from the Common Stock upon the date which
is the earlier of (i) 10 days following a public announcement that a person or
group of affiliated or associated persons (an "Acquiring Person") has acquired,
or obtained the right to acquire, beneficial ownership of 15% or more of the
outstanding shares of Common Stock (the "Stock Acquisition Date"), or (ii) 10
business days following the commencement of a tender offer or exchange offer
that would result in a person or group beneficially owning 15% or more of such
outstanding shares of Common Stock (the earlier of said dates being called the
"Distribution Date").
Until the Distribution Date, (i) the Rights will be evidenced by the
Common Stock certificates and will be transferred with and only with such Common
Stock certificates, (ii) new Common Stock certificates issued after the Record
Date will contain a notation incorporating the Rights Agreement by reference,
and (iii) the surrender for transfer of any certificates for Common Stock
outstanding also will constitute the transfer of the Rights associated with the
Common Stock represented by such certificate.
The Rights will not be exercisable until the Distribution Date and will
expire at the close of business on the tenth anniversary of the declaration of
the Rights, unless earlier redeemed by the Company as described below.
As soon as practicable after the Distribution Date, Rights Certificates
will be mailed to holders of record of the Common Stock as of the close of
business on the Distribution Date and, thereafter, the separate Rights
Certificates alone will represent the Rights. Except as otherwise determined by
the Board of Directors, only shares of Common Stock issued prior to the
Distribution Date will be issued with Rights.
With certain exceptions, in the event that at any time following the
Distribution Date,
(i) the Company is the surviving corporation in a merger
with an Acquiring Person
24
<PAGE>
(ii) and its Common Stock is not changed or exchanged;
(iii) a Person becomes the beneficial owner of 15% or more
of the then outstanding shares of Common Stock (except
pursuant to an offer for all outstanding shares of Common
Stock which the Continuing Directors (as defined below)
determine to be fair and otherwise in the best interests of
the Company and its shareholders (other than the Acquiring
Person));
(iv) an Acquiring Person engages in one or more
"self-dealing" transactions as set forth in the Rights
Agreement; or
(v) during such time as there is an Acquiring Person, an
event occurs which results in such Acquiring Person's
ownership interest being increased by more than 1% (e.g., a
reverse stock split);
each holder of a Right will thereafter have the right to receive, upon exercise,
Common Stock (or, in certain circumstances, cash, property or other securities
of the Company, subject to certain limitations) having a value equal to two
times the exercise price of the Right. Notwithstanding any of the foregoing,
following the occurrence of any of the events set forth in this paragraph, all
Rights that are, or (under certain circumstances specified in the Rights
Agreement) were, beneficially owned by any Acquiring Person will be null and
void. However, Rights are not exercisable following the occurrence of any of the
events set forth above until such time as the Rights are no longer redeemable by
the Company as set forth below.
For example, at an exercise price of $50.00 per Right, each Right not
owned by an Acquiring Person (or by certain related parties) following an event
set forth in the preceding paragraph would entitle its holder to purchase
$100.00 worth of Common Stock (or other consideration, as noted above) for
$50.00. Assuming that the Common Stock had a per share value of $20.00 at such
time, the holder of each valid Right would be entitled to purchase five shares
of Common Stock for $50.00.
With certain exceptions, in the event that, at any time following the
Stock Acquisition Date,
(i) the Company is acquired in a merger or other
business combination transaction in which the Company is not
the surviving corporation or where the Company is the
surviving corporation and all or part of the outstanding
shares of Common Stock are changed into or exchanged for stock
or other securities of any other person or cash or any other
property (other than a merger described in sub clause (i) of
the second preceding paragraph or a merger which follows an
offer described in the parenthetical in sub clause (ii) of the
second preceding paragraph); or
(ii) 50% or more of the Company's assets or earning power
is sold or transferred; each holder of a Right (except rights
which previously have been voided as set forth above) shall
thereafter have the right to receive, upon exercise,
25
<PAGE>
common stock of the acquiring company having a value equal to
two times the exercise price of the Right.
For example, at an exercise price of $50.00 per Right, each Right
following an event set forth in the preceding paragraph would entitle its holder
to purchase $100.00 worth of common stock of the acquiring company for $50.00.
Assuming that the common stock of the acquiring company had a per share value of
$20.00 at such time, the holder of each issued Right would be entitled to
purchase five shares of the common stock of the acquiring company for $50.00.
The Purchase Price payable, and the number of shares of Common Stock
(or the number and kind of other securities or property, as the case may be)
issuable, upon exercise of the Rights would be subject to adjustment from time
to time to prevent dilution,
(i) in the event of a stock dividend on, or a
subdivision, combination or reclassification of, the Common
Stock;
(ii) if holders of the Common Stock are granted certain
rights or warrants to subscribe for Common Stock or
convertible securities at less than the current market price
of the Common Stock; or
(iii) upon the distribution to holders of the Common Stock
of evidences of indebtedness or assets (excluding regular
quarterly cash dividends) or of subscription rights or
warrants (other than those referred to above).
With certain exceptions, no adjustment in the Purchase Price will be
required until cumulative adjustments amount to at least 1% of the Purchase
Price. The Company will not be required to issue fractional shares of Common
Stock and in lieu thereof an adjustment in cash will be made. For fractional
shares of Common Stock, the adjustment will be based on the market price of the
Common Stock on the last trading date prior to the date of exercise.
In general, the Company may redeem the Rights in whole, but not in
part, at any time until ten days following the Stock Acquisition Date, at a
price of $.01 per Right (payable in cash, Common Stock or other consideration
deemed appropriate by the Board of Directors). Under certain circumstances set
forth in the Rights Agreement, the decision to redeem requires the concurrence
of a majority of the Continuing Directors. After the redemption period has
expired, the Company's right of redemption may be reinstated, with the
concurrence of a majority of the Continuing Directors,
(i) if an Acquiring person reduces its beneficial
ownership to five percent (5%) or less of the outstanding
shares of Common Stock in a transaction or series of
transactions not involving the Company; or
(ii) provided that such redemption is incidental to a
merger or other business combination transaction or series of
transactions involving the Company but not involving an
Acquiring Person or any person who was an Acquiring Person or
any affiliate or associate thereof.
26
<PAGE>
Immediately upon the action of the Board of Directors ordering
redemption of the Rights with, where required, the concurrence of the Continuing
Directors, the Rights will terminate and the only right of the holders of Rights
will be to receive the $.01 per Right redemption price.
The term "Continuing Directors" means any member of the Board of
Directors of the Company who was a member of the Board prior to the date of the
Rights Agreement, and any person who is subsequently elected to the Board if
such person is recommended or approved by a majority of the Continuing
Directors, but shall not include an Acquiring Person or an affiliate or
associate of an Acquiring Person or any representative of the foregoing
entities.
Until a Right is exercised, the holder thereof, as such, will have no
rights as a shareholder of the Company, including, without limitation, the right
to vote or to receive dividends. While the distribution of the Rights will not
be taxable to shareholders or to the Company, shareholders may, depending upon
the circumstances, recognize taxable income in the event that the Rights become
exercisable for Common Stock (or other consideration) of the Company or for
common stock of an acquiring company as set forth above.
Any of the provisions of the Rights Agreement may be amended by the
Board of Directors of the Company prior to the Distribution Date, but amendments
of those provisions relating to the principal economic terms of the Rights
require approval of a majority of the Continuing Directors. After the
Distribution Date, the provisions of the Rights Agreement may be amended by the
Board (in certain circumstances, with the concurrence of the continuing
Directors) in order to cure any ambiguity, to make changes which do not
adversely affect the interests of holders of Rights (excluding the interests of
any Acquiring Person), or to shorten or lengthen any time period under the
Rights Agreement; provided, however, that no amendment to adjust the time period
governing redemption shall be made at such time as the Rights are not
redeemable.
27
<PAGE>
PART II
ITEM 1. MARKET PRICE OF AND DIVIDENDS ON THE REGISTRANT'S COMMON EQUITY AND
OTHER STOCKHOLDER MATTERS
(a) Market Information
(1) The common stock of the Company is presently traded on the NASDAQ OTC
Bulletin Board, under the symbol "USMG".
The following represents the high and low bid prices of the Company's
Common Stock during the last two fiscal years and the current fiscal year
through April 10, 2000, as provided by the National Quotation Bureau, Inc. The
quotations shown reflect inter-dealer prices, without retail mark-up, mark-down,
or commissions and may not represent actual transactions.
<TABLE>
<CAPTION>
BID PRICES
HIGH LOW
<S> <C> <C>
1998
Jan. 1 through Mar. 31 -- --
Apr. 1 through June 30 -- --
July 1 through Sept. 30 -- --
Oct. 1 through Dec. 31 -- --
1999
Jan. 1 through Mar. 31 -- --
Apr. 1 through June 30(1) $6.125 $4.00
July 1 through Sept. 30 6.8125 3.50
Oct. 1 through Dec. 31 6.00 2.9375
2000
Jan. 1 through March 31 5.625 1.8125
April 1 through April 7 4.00 3.625
</TABLE>
-----------------------------
(1) Commencing May 24, 1999
(b) Shareholders
As of April 10, 2000, the Company had issued 13,575,680 shares of
Common Stock, all of which were still outstanding and held by individual
shareholders and brokerage firms and/or clearing houses in "street name" for
their clients. The Company believes that there are approximately 450 beneficial
owners of its common stock, including shares held in street name.
(b) Dividends
28
<PAGE>
The Company has not paid any dividends to date.
ITEM 2. LEGAL PROCEEDINGS
The Company is not currently involved in any legal proceeding nor does
it have knowledge of any threatened litigation. On February 4, 2000, however,
the Company received a letter from counsel to Dr. Brian Levine indicating that
Dr. Levine is the owner of all right, title and interest in United States Letter
Patent No. 4,915,435 (the "Patent") entitled "Mobile Operating Room With Pre and
Post Operational Areas. In his letter, Dr. Levine's counsel alleged that the
mobile medical operating room contemplated under the Company's contract with
North Carolina infringes one or more of the claims included in the Patent.
Consequently, Dr. Levine's counsel requested that the Company review the Patent
and inform Dr. Levine as to why the Company believes that its mobile operating
room product does not infringe one or more of the claims in the Patent.
Alternatively, Dr. Levine's counsel requested that the Company initiate contact
to negotiate a non-exclusive license under the Patent. The Company has initiated
contact with Dr. Levine and on April 10, 2000 Dr. Levine and the Company jointly
signed a letter acknowledging that the Company has recognized Dr. Levine as the
sole owner of the Patent. The letter also states that the Company and Dr. Levine
wished to enter into negotiations regarding compensation with respect to the
subject matter of the Patent. The Company and Dr. Levine are currently
conducting such negotiations. In the event the Company and Dr. Levine do not
reach an agreement with respect to a license under the Patent, the Company's
business and financial condition may be materially and adversely affected (if
Dr. Levine successfully establishes that the Company has infringed upon the
Patent and if the Patent is found to be enforceable). No assurance can currently
be given as to whether or not the Patent would be found to be enforceable.
ITEM 3. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
Not applicable.
ITEM 4. RECENT SALES OF UNREGISTERED SECURITIES
On April 26, 1999, in connection with the merger of AMSSI and USMGF,
the Company issued an aggregate amount of 10,500,000 shares of Common Stock to
the persons who were shareholders of AMSSI immediately prior to the merger in
consideration for all the issued and outstanding shares of Common Stock of
AMSSI. The Company relied upon Section 4(2) of the Securities Act of 1933, as
amended (the "Act"), as an exemption from the registration requirements of the
Act because the merger did not involve any public offering of the Company's
stock. Specifically, the Company issued shares to six individuals who were
closely familiar with the business of AMSSI and the Company, the transfer of
such shares was restricted, and there was no public offer, solicitation of
offers or advertising with respect to the issuance of such shares.
On or about April 26, 1999, the Company issued 575,000 shares of Common
Stock to TFC in consideration of TFC's agreement to waive its retainer fee
pursuant to the terms of a Consulting Agreement between the Company and TFC
dated April 26, 1999. The Company and
29
<PAGE>
TFC also agreed that such shares were issued as payment to TFC for its merger
and acquisition services in the amount of 57,500 with respect to the merger of
AMSSI and USMGF. The Company relied on Section 4(2) of the Act as an exemption
from registration under the Act because the issuance did not involve a public
offering of shares. Specifically, the issuance was to one entity, involved a
restriction on the transfer of the shares and there was no solicitation of
offers from the public or advertising regarding the issuance. In accordance with
Financial Accounting Standard No. 123, paragraph 8, the value of the shares
issued was based upon the fair value of the services the Company received from
TFC.
ITEM 5. INDEMNIFICATION OF DIRECTORS AND OFFICERS
The Company's Bylaws and certain sections of the Nevada Revised
Statutes provide for indemnification of the Company's officers and directors in
certain situations where they might otherwise personally incur liability,
judgments, penalties, fines and expenses in connection with a proceeding or
lawsuit to which they might become parties because of their position with the
Company. To the extent that indemnification may be related to liability arising
under the Securities Act, the Securities and Exchange Commission takes the
position that indemnification is against public policy as expressed in the
Securities Act and is, therefore, unenforceable.
30
<PAGE>
PART F/S--FINANCIAL STATEMENTS AND SCHEDULES
DECEMBER 31, 1999 AND 1998
F-1
<PAGE>
U.S. MEDICAL GROUP, INC.
INDEX TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Page
<S> <C>
Report of Independent Certified Public Accountants F-3
Consolidated Balance Sheet at December 31, 1999 and 1998 F-4
Consolidated Statements of Operations for the two years
ended December 31, 1999 and 1998 F-5
Consolidated Statements of Stockholders' Equity for the two years
ended December 31, 1999 and 1998 F-6
Consolidated Statements of Cash Flows for the two years
ended December 31, 1999 and 1998 F-7
Notes to Consolidated Financial Statements F-8 - F14
</TABLE>
F-2
<PAGE>
STEFANOU & COMPANY, LLP
CERTIFIED PUBLIC ACCOUNTANTS
1360 Beverly Road
Suite 305
McLean, VA 22101-3621
703-448-9200
703-448-3515 (fax)
[email protected]
Philadelphia, PA
- --------------------------------------------------------------------------------
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
Board of Directors
U.S. Medical Group , Inc.
Orlando, Florida
We have audited the accompanying consolidated balance sheet of U.S.
Medical Group , Inc. and its subsidiary as of December 31, 1999 and 1998 and the
related consolidated statements of operations, stockholders' equity, and cash
flows for the years then ended. These financial statements are the
responsibility of the company's management. Our responsibility is to express an
opinion on these financial statements based upon 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
misstatements. 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 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 U.S. Medical Group ,
Inc. and its subsidiary as of December 31, 1999 and 1998, and the results of its
operations and its cash flows for the years then ended, in conformity with
generally accepted accounting principles.
/s/ STEFANOU & COMPANY, LLP
Stefanou & Company, LLP
Certified Public Accountants
McLean, Virginia
April 3, 2000
F-3
<PAGE>
U.S. MEDICAL GROUP , INC.
CONSOLIDATED BALANCE SHEET
DECEMBER 31, 1999 AND 1998
ASSETS
<TABLE>
<CAPTION>
1999 1998
---------- ----------
<S> <C> <C>
Current assets:
Cash and equivalents $ 22,763 $ 49,185
Accounts receivable, net of allowance of doubtful
accounts 548,669 218,347
Prepaid expenses 13,330 5,623
---------- ----------
Total current assets 584,762 273,155
Property and equipment-at cost:(Notes A and B)
Mobile unit and medical equipment 3,642,467 1,525,771
Furniture and fixtures 61,075 56,368
---------- ----------
3,703,542 1,582,139
Less accumulated depreciation 410,389 228,387
3,293,153 1,353,752
Other assets:
Financing fees, less amortization of $2,548 and
$2,548 in 1999 and 1998, respectively 12,236 5,096
---------- ----------
$3,890,151 $1,632,003
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current maturities of long-term debt (Note B) $ 801,602 $ 615,913
Deferred tax liability 81,406 --
Accounts payable and accrued expenses 127,297 38,039
Total current liabilities 1,010,305 653,952
Long-term debt, less current maturities (Note B) 1,447,045 149,478
Deferred tax liability (Note C) 301,253 --
Stockholders' equity (Note A):
Preferred stock, par value , $.001 per share; authorized at
December 31, 1999: 20,000,000 shares; none issued ;
none authorized at December 31, 1998 -- --
Common stock, par value, $.001 per share; 100,000,000 authorized at
December 31, 1999; 13,575,380 issued; 100 shares authorized at December
31, 1998, par value
$10 per share; 100 shares issued at December 31, 1998 13,575 1,000
Additional paid-in-capital
80,925 24,000
Retained earnings 1,037,048 803,573
---------- ----------
1,131,548 828,573
---------- ----------
$3,890,151 $1,632,003
========== ==========
</TABLE>
See accompanying notes to financial statements
F-4
<PAGE>
U.S. MEDICAL GROUP , INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED DECEMBER 31, 1999 AND 1998
<TABLE>
<CAPTION>
1999 1998
----------- -----------
<S> <C> <C>
Revenues:
Patient fees $ 2,041,034 $ 1,655,018
Operating Expenses:
Selling, general and administrative 1,161,335 688,950
Interest expense 81,562 98,774
Depreciation expense 182,003 161,379
----------- -----------
Operating expenses 1,424,900 949,103
Net income before taxes 616,134 705,915
Provision for income taxes (Note C) 382,659 --
----------- -----------
Net income $ 233,475 $ 705,915
=========== ===========
Earnings per common share $ .02 $ .05
=========== ===========
(basic and assuming dilution)
Weighted average shares outstanding
Basic 13,575,380 13,575,380
Diluted 13,633,665 13,633,665
</TABLE>
See accompanying notes to financial statements.
F-5
<PAGE>
U.S. MEDICAL GROUP , INC.
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
FOR THE YEARS ENDED DECEMBER 31, 1999 AND 1998
<TABLE>
<CAPTION>
Common Additional Retained
Shares Amount Paid-in-capital Earnings Total
<S> <C> <C> <C> <C> <C>
Balance at January 1, 1998 100 $ 1,000 $ 24,000 $ 97,638 $ 122,658
Net income -- -- -- 705,915
----------- ----------- ----------- ----------- -----------
705,915
Balance at December 31, 1998 100 1,000 24,000 803,573 828,573
Shares issued in connection
with merger of AMSSI and USMG 10,500,000 10,500 -- -- 10,500
Retirement of AMSSI shares (100) (1,000) -- -- (1,000)
Shares issued to consultant in exchange for services 575,000 575 56,925 -- 57,500
Shares retained by former USMG shareholders 2,500,380 2,500 -- -- 2,500
Net income -- -- -- 233,475 233,475
----------- ----------- ----------- ----------- -----------
Balance at December 31, 1999 13,575,380 $ 13,575 $ 80,925 $ 1,037,048 $ 1,131,548
=========== =========== =========== =========== ===========
</TABLE>
See accompanying notes to financial statements
F-6
<PAGE>
U.S. MEDICAL GROUP , INC.
CONSOLIDATED STATEMENTS OF CASH FLOW
FOR THE YEARS ENDED DECEMBER 31, 1999 AND 1998
<TABLE>
<CAPTION>
1999 1998
----------- -----------
<S> <C> <C>
Cash flows from operating activities:
Net income for the year $ 233,475 $ 705,915
Adjustments to reconcile
net income to net cash:
Depreciation and amortization 182,003 161,379
Common stock issued in connection with services
rendered 57,500 --
(Increase) decrease in:
Accounts receivable (330,332) (62,487)
Prepaid expenses and other assets (14,847) (210)
Deferred taxes and other 313,263 --
Accounts payable and accrued expenses 170,663 (28,213)
----------- -----------
Net cash provided by operating activities 611,725 776,384
Cash flows used in investing activities:
Capital expenditures, net (2,121,403) (49,006)
----------- -----------
Net cash used in investing activities (2,121,403) (49,006)
Cash flows (used) provided in financing activities:
Proceeds from bank loans 2,190,000 --
Proceeds from shareholder loans 65,000 40,000
Repayments of loans from banks (682,488) (723,485)
Repayments of loans from shareholders (89,256) (145,721)
----------- -----------
Net cash (used) provided in financing activities 1,483,256 (829,206)
----------- -----------
Net increase (decrease) in cash (26,422) (101,828)
Cash at beginning of year 49,185 151,013
----------- -----------
Cash at end of year $ 22,763 $ 49,185
=========== ===========
Supplemental disclosure of Cash Flows Information
Cash paid during the year for interest $ 76,789 $ 98,244
Common stock issued for services 57,500 --
Acquisition:
Assets acquired 31,385 --
Accumulated deficit 11,075 --
Liabilities assumed (36,585) --
Common stock issued (5,875) --
-----------
Net cash paid for acquisition $ --
===========
</TABLE>
See accompanying notes to financial statements.
F-7
<PAGE>
U.S. MEDICAL GROUP , INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1999 AND 1998
NOTE A - SUMMARY OF ACCOUNTING POLICIES
A summary of the significant accounting policies applied in the preparation of
the accompanying consolidated financial statements follows.
Business, Basis of Presentation and Merger
On April 26, 1999, American Mobile Surgical Services, Inc., a Florida
corporation (or "AMSSI"), completed a merger with U. S. Medical Group
(Florida), Inc., a Florida corporation (or "USMGF"), a wholly-owned
subsidiary of U.S. Medical Group, Inc. , (or "USMG" or "Company"), an
inactive Nevada corporation with no significant assets or operations in a
transaction accounted for using the purchase method of accounting. As a
result of the merger, AMSSI changed its name to U. S. Medical Group (Florida)
Inc. Effective with the merger, all previously outstanding common stock of
AMSSI was exchanged for common stock of USMG resulting in the previous
security holders of the AMSSI owning approximately 81% of the voting stock of
USMG , in an exchange ratio of 1 share of AMSSI common stock for 105,000
shares of the USMG common stock.
The total purchase price and carrying value of net assets acquired of USMG was
$5,875. The net assets acquired were as follows:
<TABLE>
<S> <C>
Net current assets $31,385
Accumulated deficit 11,075
Net current liabilities (36,585)
-------
$ 5,875
=======
</TABLE>
As USMG was an inactive corporation with no significant operations, AMSSI
recorded the carryover historical basis of net tangible assets acquired, which
did not differ materially from their fair values. The results of operations
subsequent to the date of acquisition are included in the Company's consolidated
statement of operations.
The consolidated financial statements include the accounts of the Company , and
its wholly-owned subsidiary, U. S. Medical Group (Florida), Inc., formerly
American Mobile Surgical Services, Inc. In accordance with APB Opinion 16, the
consolidated financial statements include the accounts of AMSSI as the acquiring
entity and USMG as the wholly-owned subsidiary. Significant intercompany
transactions have been eliminated in consolidation.
REVENUE RECOGNITION
Revenues are recognized at the time services are provided.
PROPERTY AND EQUIPMENT
For financial statement purposes, property and equipment are depreciated using
the straight-line method over their estimated useful lives (five years for
furniture, fixtures and equipment and 10 years for the mobile surgical unit and
related medial equipment). Financing costs are amortized over the term of the
respective loan. Depreciation and amortization expense for 1999 and 1998 was
$182,003 and $ 161,379 respectively. An accelerated method of depreciation is
used for tax purposes.
F-8
<PAGE>
U.S. MEDICAL GROUP , INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1999 AND 1998
NOTE A - SUMMARY OF ACCOUNTING POLICIES (CONTINUED)
Intangible Assets
Intangible assets consist of financing fees related to notes payable. Financing
costs are amortized over the term of the respective loan.
INCOME TAXES
Until April 26, 1999 ,the Company's predecessor, U. S. Medical Group (Florida),
Inc. (formerly American Mobile Surgical Services, Inc.) ("USMGF"), elected to be
taxed under the provision of Subchapter S of the Internal Revenue Code. As a
result, the USMGF's 1997, 1998 and 1999 earnings through the day preceding the
merger have been taxed, with certain exceptions, for federal income tax purposes
directly to the stockholders of USMGF. Under those provisions, USMGF did not pay
federal and state corporate income taxes on its taxable income. Instead, the
USMGF stockholders were liable for individual federal and state income taxes on
their respective share of the USMGF's net income.
Effective with the merger, USMGF ceased operating as an S Corporation and became
subject to federal and State corporate income taxes. USMGF accounts for income
taxes in accordance with Statement of Financial Accounting Standards No. 191,
"Accounting for Income Taxes." Under the method, deferred tax assets and
liabilities are determined based on differences between the financial reporting
and tax basis of assets, and liabilities are measured using the enacted tax
rates expected to be in effect when the differences are settled. A deferred tax
liability of $202,600 ($184,400 federal and $18,200 State) was recorded at the
time of the merger to reflect the expected tax effect of accumulated differences
on that date.
CASH EQUIVALENTS
For purposes of the Statements of Cash Flows, the Company considers all highly
liquid debt instruments purchased with a maturity date of three months or less
to be cash equivalents.
LONG-LIVED ASSETS
The Company accounts for its long-lived assets under the provision of Statement
of Financial Accounting Standards No. 121 Accounting for the Impairment of
Long-Lived assets and for Long-Lived Assets to be Disposed of (SFAS 121).
The Company's long-lived assets are reviewed for impairment whenever events or
changes in circumstances indicate that the carrying amount of such assets may
not be recoverable. Events relating to recoverability may include significant
unfavorable changes in business conditions, recurring losses, or a forecasted
inability to achieve break-even operating results over an extended period. The
Company evaluates the recoverability of long-lived assets based upon forecasted
undercounted cash flows. Should an impairment in value be indicated, the
carrying value of intangible assets will be adjusted, based on estimates of
future discounted cash flows resulting from the use and ultimate disposition of
the asset.
F-9
<PAGE>
U.S. MEDICAL GROUP , INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1999 AND 1998
NOTE A - SUMMARY OF ACCOUNTING POLICIES (CONTINUED)
Stock Based Compensation
The Company accounts for stock based compensation using the intrinsic value
method prescribed in Accounting Principle Board Opinion No. 25, "Accounting for
Stock Issued to Employees." The Company has adopted the disclosure-only
provisions of Statement of Financial Accounting Standards No. 123, "Accounting
for Stock Based Compensation" with respect to options and warrants granted to
employees.
ADVERTISING
The Company follows the policy of charging the costs of advertising to expenses
incurred. Advertising costs charged to expenses for 1999 and 1998 was $25,786
and $9,469, respectively.
USE OF ESTIMATES
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect certain reported amounts and disclosures. Accordingly actual results
could differ from those estimates.
Concentrations of Credit Risk
Financial instruments and related items which potentially subject the Company to
concentrations of credit risk consist primarily of cash, cash equivalents and
trade receivables. The Company places its cash and temporary cash investments
with high credit quality institutions. At times, such investments may be in
excess of the FDIC insurance limit. The Company's two customers are the Florida
Department of Corrections and the North Carolina Department of Corrections. (see
Note G). The Company periodically reviews its trade receivables in determining
its allowance for doubtful accounts. The allowances for doubtful accounts was $0
at December 31, 1999 and 1998, respectively.
EARNINGS PER SHARE
The Company has adopted Statement of Financial Accounting Standard No. 128,
"Earnings Per Share," specifying the computation, presentation and disclosure
requirements of earnings per share information. Basic earnings per share has
been calculated based upon the weighted average number of common shares
outstanding. Stock options and warrant's have been excluded as common stock
equivalents in the diluted earnings per share because they are either
antidilutive, or their effect is not material. There is no effect on earnings
per share information for the years ended December 31, 1999 and 1998 relating to
the adoption of this standard.
COMPREHENSIVE INCOME
Statement of Financial Accounting Standards No.130, "Reporting Comprehensive
Income" ("SFAS 130"), establishes standards for reporting and display of
comprehensive income, its components and accumulated balances. Comprehensive
income is defined to include all changes in equity except those resulting from
investments by owners and distributions to owners. Among other disclosures, SFAS
130 requires that all items that are required to be recognized under current
accounting standards as components of comprehensive income be reported in a
financial statement that is displayed with the same prominence as other
financial statements. The Company adopted SFAS 130 during the year ended
December 31, 1998 and has no items of comprehensive income to report.
F-10
<PAGE>
U.S. MEDICAL GROUP , INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1999 AND 1998
NOTE A - SUMMARY OF ACCOUNTING POLICIES (CONTINUED)
NEW ACCOUNTING PRONOUNCEMENTS
The Company adopted Statement of Financial Accounting Standards No. 131,
Disclosures about Segments of an Enterprise and Related Information ("SFAS 131")
in the year ended December 31, 1998. SFAS establishes standards for reporting
information regarding operating segments in annual financial statements and
requires selected information for those segments to be presented in interim
financial reports issued to stockholders. SFAS 131 also establishes standards
for related disclosures about products and services and geographic areas.
Operating segments are identified as components of an enterprise about which
separate discrete financial information is available for evaluation by the chief
operating decision maker, or decision making group, in making decisions how to
allocate resources and assess performance. The information disclosed herein,
materially represents all of the financial information related to the Company's
principal operating segment.
The Company adopted Statement of Financial Accounting Standards No. 132,
Employers' Disclosures about Pension and Other Post Employment Benefits (SFAS
132") in the year ended December 31, 1999. SFAS No. 132 establishes disclosure
requirements regarding pension and post employment obligations. SFAS No. 132
does not effect the Company as of December 31, 1999.
In March 1998, Statement of Position No. 98-1 was issued, which specifies the
appropriate accounting for costs incurred to develop or obtain computer software
for internal use. The new pronouncement provides guidance on which costs should
be capitalized, and over what period such costs should be amortized and what
disclosures should be made regarding such costs. This pronouncement is effective
for fiscal years beginning after December 15, 1998, but earlier application is
acceptable. Previously capitalized costs will not be adjusted. The Company
believes that it is already in substantial compliance with the accounting
requirements as set forth in this new pronouncement, and therefore believes that
adoption will not have a material effect on financial condition or operating
results.
In April 1998, Statement of Position No. 98-5 was issued which requires that
companies expense defined previously capitalized start-up costs including
organization costs and expense future start-up costs as incurred. Adoption of
this statement does not have an effect on financial condition or operating
results.
The Company adopted Statement of Financial Standards No. 133, Accounting for
Derivative Instruments and for Hedging Activities ("SFAS No. 133") in the year
ended December 31, 1999. SFAS No. 133 requires that certain derivative
instruments be recognized in balance sheets at fair value and for changes in
fair value to be recognized in operations. Additional guidance is also provided
to determine when hedge accounting treatment is appropriate whereby hedging
gains and losses are offset by losses and gains related directly to the hedged
item. SFAS No. 133's impact on the Company's consolidated financial statements
is not expected to be material as the Company has not historically used
derivative and hedge instruments.
NOTE B - LONG TERM DEBT
<TABLE>
<CAPTION>
1999 1998
---- ----
<S> <C> <C>
Bank loan payable in monthly installments of $13,194,
plus interest at the Lender's prime rate, secured by
equipment and guaranteed by certain Company shareholders $ 79,167 $ 237,500
F-11
<PAGE>
U.S. MEDICAL GROUP , INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1999 AND 1998
NOTE B - LONG TERM DEBT (CONTINUED)
Bank loan payable in monthly installments of $42,685,
including interest at 8.4% per annum, secured by
mobile unit and guaranteed by certain Company shareholders - 291,201
Bank loan payable in monthly installments of $24,436
plus interest at Lenders' prime rate , secured by
mobile unit and guaranteed by certain Company shareholders 1,947,046 -
Bank loan payable in monthly installments of interest
only at the Lender's prime rate, secured by medical
equipment and guaranteed by certain Company shareholders 150,000 140,000
Shareholder notes payable in monthly installments of
$2,249.46, including interest at 8.5% per annum, unsecured 17,435 41,690
Shareholder notes payable, interest at 8.5% per annum, unsecured 55,000 55,000
----------- -----------
2,248,648 765,391
Less: Current portion of long term debt (801,602) (615,913)
----------- -----------
$ 1,447,046 $ 149,478
=========== ===========
</TABLE>
Aggregate maturities of long-term debt as of December 31, 1999 are as follows:
<TABLE>
<CAPTION>
Year Amount
---- ------
<S> <C> <C>
2001 $ 500,000
2002 500,000
2003 447,046
-----------
$ 1,447,046
===========
</TABLE>
NOTE C - INCOME TAXES
Provision for income taxes consists of the following components:
<TABLE>
<CAPTION>
Federal State Total
------- ----- -----
<S> <C> <C> <C>
Currently payable $ 73,612 $ 7,794 $ 81,406
Deferred provision
Timing differences existing on merger date 184,400 18,200 202,600
Timing differences occurring after merger 88,009 10,644 98,653
-------- -------- --------
272,409 28,844 301,253
-------- --------
$346,021 $ 36,638 $382,659
======== ======== ========
</TABLE>
As the result of the merger (See Note A), the Company's tax status changed from
a non-taxable S-Corporation to a C-Corporation subject to both federal tax and
Florida franchise tax on income. Accordingly, the deferred tax liability of
$202,600 at the date the merger was effective and the deferred tax liability for
timing differences in recording revenues and expenses for the period since the
merger have been recorded as a charge to the deferred tax provision.
The following summarizes the significant differences between the expected
federal and state income tax and the Company's tax provision for financial
statement purposes.
F-12
<PAGE>
U.S. MEDICAL GROUP , INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1999 AND 1998
NOTE C - INCOME TAXES (continued)
<TABLE>
<CAPTION>
Federal State
------- -----
<S> <C> <C> <C> <C>
Expected tax provision $ 209,485 (34%) $ 22,180 (3.6%)
Permanent differences:
Benefit of graduated tax rates (11,750) ( 250)
Non-deductible expenses 22,273 2,070
Income prior to merger taxed to S-Corp
shareholders (74,539) (7,892)
Timing differences
Deferred tax related to tax basis timing
differences at time of merger 200,552 20,530
---------- --------
$ 346,021 $ 36,638
========== ========
</TABLE>
NOTE D - COMMITMENTS AND CONTINGENCIES
The Company sub-leases office space on a month-to-month basis from an entity
owned by a Company stockholder.
The Company leases a furnished apartment in Raleigh, North Carolina. The lease,
which has a one year term and expires in September, 2000, provides for monthly
payments of $1,232.
The Company's rental expense for 1999 and 1998 is $ 40,316 and $21,359,
respectively.
Future minimum lease payments are as follows:
<TABLE>
<S> <C>
2000 $11,088
</TABLE>
NOTE E-CAPITAL STOCK
American Mobile Surgical Services, Inc. ("AMSSI") was incorporated in March,
1996 and formed under the laws of the State of Florida. In 1996, AMSSI issued a
total of 100 shares of its common stock to its founders in exchange for $25,000.
In April, 1999, AMSSI completed a merger with U. S. Medical Group (Florida),
Inc. , a wholly-owned subsidiary of U. S. Medical Group, Inc.("USMG"), a Nevada
corporation with no material operations. The shareholders of AMSSI exchanged all
of the outstanding shares of common stock of AMSSI in an exchange ratio of 1
share of AMSSI common stock for 105,000 shares in USMG common stock.
Immediately following the merger, AMSSI was renamed U. S. Medical Group
(Florida), Inc..
Share amounts presented in the consolidated balance sheets and consolidated
statements of stockholders' equity reflect the actual share amounts outstanding
for each period presented.
NOTE F - INTEREST COSTS
Interest expense for 1999 and 1998 is $81,562 and $98,774, respectively.
Interest expense is charged to operations in the period incurred.
F-13
<PAGE>
U.S. MEDICAL GROUP , INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1999 AND 1998
NOTE G - MAJOR CUSTOMERS
The Company's sole customers for 1999 was the State Florida and the State of
North Carolina. The Company's sole customer for 1998 was the State of Florida
(See Note B).
NOTE H - NET INCOME PER COMMON SHARE
The following table present the computation of basic and diluted net income per
share:
<TABLE>
<CAPTION>
1999 1998
---- ----
<S> <C> <C>
Net income available for common shareholders $ 233,475 $ 705,915
Basic and fully diluted net income per share $ .02 $ .05
Weighted average common shares outstanding -basic 13,575,380 13,575,380
========== ==========
Weighted average common shares outstanding-diluted 13,633,665 13,633,665
========== ==========
</TABLE>
Net income per share is based upon the weighted average number of shares of
common stock outstanding. In April, 1999, AMSSI shareholders exchanged for
common stock of USMG 1 share of AMSSI common stock for 105,000 shares of the
USMG common stock (See Note A). Accordingly, all historical weighted average
share and per share amounts have been restated to reflect this merger.
NOTE I- PENSION PLAN
In October, 1999, USMG established a SIMPLE IRA retirement plan for its
employees. Under the plan, the Company is required to make matching
contributions up to 3% of eligible employee's salary up to certain statutory
limits.
Plan expense for 1999 was $1,441.
NOTE J-STOCK OPTIONS AND WARRANTS
The Company has a nonqualified stock option plan to provide key employees and
non-employees the opportunity to participate in equity ownership. Options may be
granted at or below the fair market value of the stock and have a five-year life
. Options granted to certain individuals vest ratably over five years. The
following table summarizes the changes in options outstanding and the related
prices for the shares of the Company's common stock issued to a key employee of
the Company.
<TABLE>
<CAPTION>
Number Weighted Average Number of
of Shares Exercise Price Shares Exercisable
<S> <C> <C> <C>
Outstanding at December 31, 1998 - -
-------
Granted 100,000 .10 -
Exercised- - - -
Cancelled -
- - -
------- ------- --------
Outstanding at December 31, 1999 100,000 - 20,000
======= ======= =======
</TABLE>
The Company granted the stock option to the key employee prior to the merger
between AMSSI and USMG. Accordingly, the Company at the time the option was
granted was a nonpublic entity, and for disclosure purposes the fair value of
each stock option grant is estimated on the date of the grant using the
Black-Scholes option pricing model with the following weighted-average
assumptions: annual dividend of $0.00, expected volatility of 0%, risk free
interest rate of 6.0% an expected life of five years for all grants. The minimum
value of the stock options granted during the year ended December 31, 1999 was $
.03. There were no adjustments made in calculating the fair value to account for
vesting provisions or for non-transferability or risk of forfeiture.
F-14
<PAGE>
U.S. MEDICAL GROUP , INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1999 AND 1998
NOTE J-STOCK OPTIONS AND WARRANTS (CONTINUED)
If the Company recognized compensation cost for the employee stock option plan
in accordance with SFAS No. 123, the Company's pro forma net income and net
income per share would have been $ 230,475 and $ .02, respectively in 1999.
NOTE K - SUBSEQUENT EVENTS
On January 25, 2000, the Company , through its wholly owned subsidiary, USMG
(Florida), Inc. declared a dividend payable to the shareholders of record on the
date of termination of the S-corporation tax status (See Note C). The dividend
of $441,700 is approximately equal to the taxable income of USMG (Florida), Inc,
from its inception through termination of its S-corporation tax status. The
distribution was financed by unsecured demand loans from significant
shareholders at 8.5% interest payable annually, and will be repaid from
operations as cash flow permits.
Subsequent to the date of the financial statements, the Company was advised by
the owner of a patent covering the manufacture and use of mobile medical
operating rooms that the Company was allegedly infringing on its patent. Due to
the considerable uncertainties that exist, the Company's management cannot
estimate the amount of a probable loss, if any, to the Company that might result
from some adverse aspects of this matter against the Company. In the opinion of
management, the outcome of such a claim could have a material effect on annual
operating results or cash flow when resolved in a future period. Accordingly, no
provision for this matter has been made in the Company's consolidated financial
statements.
F-15
<PAGE>
PART III -- EXHIBITS
Index to Exhibits. Exhibits required to be attached hereto are listed in
the Index to Exhibits of this Amendment No. 1 to Form 10-SB, which is
incorporated herein by reference.
<PAGE>
SIGNATURES
In accordance with Section 12 of the Securities Exchange Act of 1934,
the registrant caused this registration statement to be signed on its behalf by
the undersigned, thereunto duly authorized.
U.S. Medical Group, Inc.
/s/ Thomas Winters
---------------------------
Dr. Thomas Winters
Chairman of the Board and
Chief Executive Officer
Date: April 13, 2000
<PAGE>
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION
<S> <C>
2.1 Agreement and Plan of Merger dated March
31, 1999 by and between the Company
USMGF, Inc. and AMSSI(1)
3.1 Articles of Incorporation of the Company(2)
3.2 Certificate of Amendment of the Articles
of Incorporation of the Company(2)
3.3 Certificate of Amendment of the Articles
of Incorporation of the Company(2)
3.4 By-laws of the Company(2)
10.1 Consulting Agreement dated April 26, 1999
by and between the Company and
TransGlobal Financial Corporation(2)
10.2 Form of Stockholder Lock up Agreement
dated March, 25 1999 by and between
USMG and AMSSI(2)
10.3 Agreement by and between USMGF and the
Florida Department of Corrections dated
April 2, 1997(2)
10.4 Agreement by and between USMGF and the
North Carolina Department of Corrections
dated October 15, 1999(2)
11.1 Computation of Earnings per Common and
Common Share Equivalents(2)
21.1 Subsidiaries of the Company(1)
27.1 Financial Data Schedule(2)
</TABLE>
- -----------------------------
(1) Filed previously.
(2) Filed herewith.
<PAGE>
Exhibit 3.1
ARTICLES OF INCORPORATION
OF
U.S. MEDICAL GROUP INC.
FIRST. The name of the corporation is: U. S. MEDICAL GROUP INC.
SECOND. Its registered office in the State of Nevada is located at 2533
North Carson Street, Carson City, Nevada 89706 that this Corporation may
maintain an office, or offices, in such other place within or without the State
of Nevada as may be from time to time designated by the Board of Directors, or
by the By-Laws of said Corporation, and that this Corporation may conduct all
Corporation business of every kind and nature, including the holding of all
meetings of Directors and Stockholders, outside the State of Nevada as well as
within the State of Nevada
THIRD The objects for which this Corporation is formed are: To engage
in any lawful activity, including, but not limited to the following:
(A) Shall have such rights, privileges and powers as may be conferred
upon corporations by any existing law.
(B) May at any time exercise such rights, privileges and powers, when
not inconsistent with the purposes and objects for which this corporation is
organized.
(C) Shall have power to have succession by its corporate name for the
period limited in its certificate or articles of incorporation, and when no
period is limited, perpetually, or until dissolved and its affairs wound up
according to law.
<PAGE>
(D) Shall have power to sue and be sued in any court of law or equity.
(E) Shall have power to make contracts.
(F) Shall have power to hold, purchase and convey real and personal
estate and to mortgage or lease any such real and personal estate with its
franchises. The power to hold real and personal estate shall include the power
to take the same by devise or bequest in the State of Nevada, or in any other
state, territory or country.
(G) Shall have power to appoint such officers and agents as the affairs
of the corporation shall require, and to allow them suitable compensation.
(H) Shall have power to make By-Laws not inconsistent with the
constitution or laws of the United States, or of the State of Nevada, for the
management, regulation and government of its affairs and property, the transfer
of its stock, the transaction of its business, and the calling and holding of
meetings of its stockholders.
(I) Shall have power to wind up and dissolve itself, or be wound up or
dissolved.
(J) Shall have power to adopt and use a common seal or stamp, and alter
the same at pleasure. The use of a seal or stamp by the corporation on any
corporate documents is not necessary. The corporation may use a seal or stamp,
if it desires, but such use or nonuse shall not in any way affect the legality
of the document.
(K) Shall have power to borrow money and contract debts when necessary
for the transaction of its business, or for the exercise of its corporate
rights, privileges or franchises, or for any other lawful purpose of its
incorporation; to issue bonds, promissory notes, bills of exchange, debentures,
and other obligations and evidences of indebtedness, payable at a specified time
or times, or payable upon the happening of a specified event or events, whether
secured by mortgage, pledge or otherwise, or unsecured, for money borrowed, or
in payment for property purchased, or acquired, or for any other lawful object.
(L) Shall have power to guarantee, purchase, hold, sell, assign,
transfer, mortgage, pledge or otherwise dispose of the shares of the capital
stock of, or any bonds, securities or evidences of the
2
<PAGE>
indebtedness created by, any other corporation or corporations of the State of
Nevada, or any other state or government, and, while owners of such stock,
bonds, securities or evidences of indebtedness, to exercise all the rights,
powers and privileges of ownership, including the right to vote, if any.
(M) Shall have power to purchase, hold, sell and transfer shares of its
own capital stock, and use therefor its capital, capital surplus, surplus, or
other property or fund.
(N) Shall have power to conduct business, have one or more offices, and
hold, purchase, mortgage and convey real and personal property in the State of
Nevada, and in any of the several states, territories, possessions and
dependencies of the United States, the District of Columbia, and any foreign
countries.
(O) Shall have power to do all and everything necessary and proper for
the accomplishment of the objects enumerated in its certificate or articles of
incorporation, or any amendment thereof, or necessary or incidental to the
protection and benefit of the corporation, and, in general, to carry on any
lawful business necessary or incidental to the attainment of the objects of the
corporation, whether or not such business is similar in nature to the objects
set forth in the certificate or articles of incorporation of the corporation, or
any amendment thereof,
(P) Shall have power to make donations for the public welfare or for
charitable, scientific or educational purposes.
(Q) Shall have power to enter into partnerships, general or limited, or
joint ventures, in connection with any lawful activities.
FOURTH. That the total number of voting common stock authorized that
may be e issued by the Corporation is TWENTY-FIVE MILLION (25,000,000) shares of
stock at $.001 par value and no other class of stock shall be authorized. Said
shares with a par-value of $.001 may be issued by the corporation from time to
time for such considerations as may be fixed from time to time by the Board of
Directors.
FIFTH. The governing board of this corporation shall be known as
directors, and the number of directors may from time to time be increased or
decreased in such a manner as shall
3
<PAGE>
be provided by the By-Laws of this corporation, providing that the number of
directors shall not be reduced to fewer than one (1) The name and post office
address of the first Board of Directors shall be (1) in number and listed as
follows:
NAME POST OFFICE AND ADDRESS
Betty J. Elpern 2533 North Carson Street
Carson City, Nevada 89706
SIXTH. The capital stock, after the amount of the subscription price,
or par value, has been paid in, shall not be subject to assessment to pay the
debts of the corporation.
SEVENTH. The name and post office address of the Incorporator signing
the Articles of Incorporation is as follows:
NAME POST OFFICE ADDRESS
Betty J. Elpem 2533 North Carson Street
Carson City, Nevada 89706
EIGHTH. The resident agent for this corporation shall be:
LAUGHLIN ASSOCIATES, INC.
The address of said agent, and, the registered or statutory address of this
corporation in the state of Nevada, shall be:
2533 North Carson Street
Carson City, Nevada 89706
NINTH. The corporation is to have perpetual existence.
TENTH. In furtherance and not in limitation of the powers conferred by
statute, the Board of Directors is expressly authorized:
Subject to the By-Laws, if any, adopted by the Stockholders, to make,
alter or amend the By-Laws of the Corporation.
4
<PAGE>
To fix the amount to be reserved as working capital over and above its capital
stock paid in; to authorize and cause to be executed, mortgages and liens upon
the real and personal property of this Corporation.
By resolution passed by a majority of the whole Board, to designate one
(1) or more committees, each committee to consist of one or more of the
Directors of the Corporation, which, to the extent provided in the resolution,
or in the By-Laws of the Corporation, shall have and may exercise the powers of
the Board of Directors in the management of the business affairs of the
Corporation. Such committee, or committees, shall have such name, or names, as
may be stated in the By-Laws of the Corporation, or as may be determined from
time to time by resolution adopted by the Board of Directors.
When and as authorized by the affirmative vote of the Stockholders
holding stock entitling them to exercise at least a majority of the voting power
given at a Stockholders meeting called for that purpose, or when authorized by
the written consent of the holders of at least a majority of the voting stock
issued and outstanding, the Board of Directors shall have power and authority at
any meeting to sell, lease or exchange all of the property and assets of the
Corporation, including its good will and its corporate franchises, upon such
terms and conditions as its board of Directors deems expedient and for the best
interests of the Corporation.
ELEVENTH. No shareholder shall be entitled as a matter of right to
subscribe for or receive additional shares of any class of stock of the
Corporation, whether now or hereafter authorized, or any bonds, debentures or
securities convertible into stock, but such additional shares of stock or other
securities convertible into stock may be issued or disposed of by the Board of
Directors to such persons and on such terms as in its discretion it shall deem
advisable.
TWELFTH. No director or officer of the Corporation shall be personally
liable to the Corporation or any of its stockholders for damages for breach of
fiduciary duty as a director or officer involving any act or omission of any
such director or officer; provided, however, that the foregoing provision shall
not eliminate or limit the liability of a director or officer (i) for acts or
5
<PAGE>
omissions which involve intentional misconduct, fraud or a knowing violation of
law, or (ii) the payment of dividends in violation of Section 78.300 of the
Nevada Revised Statutes. Any repeal or modification of this Article by the
stockholders of the Corporation shall be prospective only, and shall not
adversely affect any limitation on the personal liability of a director or
officer of the Corporation for acts or omissions prior to such repeat or
modification.
THIRTEENTH. This Corporation reserves the right to amend, alter, change
or repeal any provision contained in the Articles of Incorporation, in the
manner now or hereafter prescribed by statute, or by the Articles of
Incorporation, and all rights conferred upon Stockholders herein are granted
subject to this reservation.
I, THE UNDERSIGNED, being the Incorporator hereinbefore named for the
purpose of forming a Corporation pursuant to the General Corporation Law of the
State of Nevada, do make and file these Articles of Incorporation, hereby
declaring and certifying that the facts herein stated are true, and accordingly
have hereunto set my hand this 13TH day of MAY, 1994.
----
/s/Betty J. Elpern
-------------------------------
Betty J. Elpern
6
<PAGE>
STATE OF NEVADA )
) SS:
CARSON CITY )
On this 13TH day of MAY 1994 in Carson City, Nevada,
---- ----
before me, the undersigned, a Notary Public in and for Carson City, State of
Nevada, personally appeared:
Betty J. Elpern.
Known to me to be the person whose name is subscribed to the foregoing document
and acknowledged to me that he e executed the same.
CHERYL MALL
NOTARY PUBLIC . NEVADA
DOUGLAS COUNTY
MY APPT. EXPIRES June 7, 199
/s/Cheryl Mall
--------------------------------
Notary Public
I, Laughlin Associates Inc. hereby accept as Resident Agent for the previously
named Corporation.
5/13/94 /s/
- -------------------------------------
DATE SERVICE COORDINATOR
<PAGE>
Exhibit 3.2
CERTIFICATE OF AMENDMENT
OF THE
ARTICLES OF INCORPORATION OF
U.S. MEDICAL GROUP INC.
The undersigned, being the President and Secretary of U.S. MEDICAL
GROUP INC., does hereby certify:
That the Board of Directors at a meeting convened, held on the 30th day
of March, 1999, adopted a resolution to amend the Corporation's Articles of
Incorporation as follows:
1. Article FIRST of the Articles of Incorporation of U.S. MEDICAL GROUP
INC. which sets forth the name of the Corporation is hereby amended to read in
its entirety as follows:
"FIRST. The name of the Corporation is U.S. MEDICAL GROUP, INC."
2. Article FOURTH of the Articles of Incorporation of U.S. MEDICAL
GROUP INC. which sets forth the number of shares of capital stock the
Corporation has the authority to issue is hereby amended to read in its entirety
as follows:
"FOURTH. The total number of shares of all classes of capital stock
which the Corporation shall have the authority to issue is One Hundred Twenty
Million (120,000,000) shares divided into two (2) classes of which One Hundred
Million (100,000,000) shares, par value $.001 per share, shall be designated
Common Stock, and Twenty Million (20,000,000) shares, par value $.001 per share,
shall be designated Preferred Stock. The Board of Directors is expressly vested
with authority to issue the Common Stock and the Preferred Stock from time to
time."
A. ALL CLASSES OF CAPITAL STOCK. The following provisions shall apply
to all classes of the Corporation's capital stock:
Section 1. ACQUISITION, REDEMPTION AND OTHER DISPOSITION. The
Corporation shall have the power to acquire (by purchase, redemption, or
otherwise), hold, own, pledge, sell, transfer, assign, reissue, cancel, or
otherwise dispose of the shares of the Corporation in the manner and to the
extent now or hereafter permitted by the laws of the State of Nevada (but such
power shall not imply an obligation on the part of the owner or holder of any
share to sell or otherwise transfer such share to the Corporation), including
the power to purchase, redeem, or otherwise acquire it's own shares, directly or
indirectly, and without pro rata treatment of the owners or holders of any class
or series of shares, unless, after giving effect thereto, the Corporation would
not be able to pay its debts as they become due in the usual course of business
or the Corporation's total assets would be less than its total liabilities (and
without regard to any amounts that would be needed, if the Corporation were to
be dissolved at the time of the purchase, redemption, or other acquisition, to
satisfy the preferential rights upon dissolution of stockholders whose
preferential rights are superior to those of the holders of the shares of the
Corporation being purchased, redeemed, or otherwise acquired, unless otherwise
expressly provided with respect to a series of Preferred Stock). Shares of the
Corporation purchased, redeemed, or otherwise acquired by it shall constitute
authorized but unissued shares, unless prior to any such purchase, redemption,
or other acquisition, or within thirty (30) days thereafter, the Board of
Directors adopts a resolution providing that such shares constitute authorized
and issued but not outstanding shares;
Section 2. REISSUANCE. Preferred Stock of any series that has been
redeemed (whether through the operation of a retirement or sinking fund or
otherwise) or purchased by the Corporation, or which, if convertible, have been
converted into shares of the Corporation of any other class or series, may be
reissued as a part of such series or of any other series of Preferred Stock,
subject to such limitations (if any) as may be fixed by the Board of Directors
with respect to such series of Preferred Stock in accordance with the provisions
of Article FOURTH, Subsection C, of these Articles of Incorporation; and
1
<PAGE>
Section 3. DISPOSITION, ISSUANCE AND SALE. The Board of Directors of
the Corporation may dispose of, issue, and sell shares in accordance with, and
in such amounts as may be permitted by, the laws of the State of Nevada and the
provisions of these Articles of Incorporation and for such consideration, at
such price or prices, at such time or times and upon such terms and conditions
(including the privilege of selectively repurchasing the same) as the Board of
Directors shall determine, without the authorization or approval by any
stockholders of the Corporation. Shares may be disposed of, issued, and sold to
such persons, firms, or corporations as the Board of Directors may determine,
without any preemptive or other right on the part of the owners or holders of
other shares of the Corporation at any class or kind to acquire such shares by
reason of their ownership of such other shares.
B. COMMON STOCK. The following provisions shall apply to the Common
Stock:
Section 1. VOTING RIGHTS. Except as otherwise provided by the General
Corporation Law of Nevada and subject to such stockholder disclosure and
recognition procedures (which may include voting prohibition sanctions) as the
Corporation may by action of its Board of Directors establish, shares of Common
Stock shall have unlimited voting rights and each outstanding share of Common
Stock shall, when validly issued by the Corporation, entitle the record holder
thereof to one vote at all stockholders' meetings on all matters submitted to a
vote of the stockholders of the Corporation.
Section 2. DIVIDENDS AND DISTRIBUTIONS. Shares of Common Stock shall be
equal in every respect insofar as their relationship to the Corporation is
concerned, but such equality of rights shall not imply equality or treatment as
to redemption or other acquisition of shares by the Corporation. Subject to the
rights of the holders of any outstanding series of Preferred Stock, the holders
of Common Stock shall be entitled to share ratably in such dividends or other
distributions (other than purchases, redemptions, or other acquisitions of
shares by the Corporation), if any, as are declared and paid from time to time
on the Common Stock at the discretion of the Board of Directors; and
Section 3. LIQUIDATION, DISSOLUTION OR WINDING UP. In the event of any
liquidation, dissolution, or winding up of the Corporation, either voluntary or
involuntary, after payment shall have been made to the holders of any
outstanding series of Preferred Stock of the full amount to which they shall be
entitled, the holders of Common Stock shall be entitled, to the exclusion of the
holders of Preferred Stock of any and all series, to share, ratably according to
the number of shares of Common Stock held by them, in all remaining assets of
the corporation available for distribution to its stockholders.
C. PREFERRED STOCK. The following provisions shall apply to the
Preferred Stock:
1. ISSUANCE. The Board of Directors is hereby expressly authorized to
provide, out of the unissued shares of Preferred Stock, for one or more series
of Preferred Stock. Before any shares of such series are issued, the Board of
Directors shall fix and hereby is expressly empowered to fix, by adopting and
filing in accordance with the General Corporation Law of Nevada, a Certificate
of Designation, after adopting a resolution or resolutions providing for the
issue of such Preferred Stock, and in such resolution or resolutions providing
for the issue of shares of each such class and of each particular series of any
such class. The Board of Directors is also expressly versed with authority to
fix the number of shares constituting any such series of any such class and to
fix the terms of such Preferred Stock or series of Preferred Stock, including
the following:
(i) the designation of such series, the number of shares to constitute
such series and the stated value thereof if different from the par value
thereof;
(ii) whether the shares of such series shall have voting rights, and,
if so, the terms of such voting rights, which may be general or limited, may
include multiple votes per share and may include the right, under specified
circumstances, to elect additional directors;
(iii) the dividends, if any, payable on such series, whether any such
dividends shall be cumulative, and, if so, from what dates, the conditions and
dated upon which such dividends shall be payable, the preference
2
<PAGE>
or relation which such dividends shall bear to the dividends payable on any
share of stock of any other class or any other series of Preferred Stock;
(iv) whether the shares of such series shall be subject to redemption
by the Corporation and, if so, the times, prices and other conditions of such
redemption;
(v) the amount or amounts payable upon shares of such series upon, and
the rights of the holders of such series in, the voluntary or involuntary
liquidation, dissolution or winding up, or upon any distribution of the assets,
of the Corporation;
(vi) whether the shares of such series shall be subject to the
operation of a retirement or sinking fund and, if so, the extent to and manner
in which any such retirement or sinking fund shall be applied to the purchase or
redemption of the shares of such series for retirement or other corporate
purposes and the terms and provisions relative to the operation thereof;
(vii) whether the shares of such series shall be convertible into, or
exchangeable for, shares or stock of any other class or any other series of
Preferred Stock or any other securities (whether or not issued by the
Corporation) and, if so, the price or prices or the rate or rates of conversion
or exchange and the method, if any, of adjusting the same, and any other terms
and conditions of conversion or exchange;
(viii) the limitations and restrictions, if any, to be effective while
any shares of such series are outstanding upon the payment of dividends or the
making of other distributions on, and upon the purchase, redemption or other
acquisition by the Corporation of the Common Stock or shares of stock of any
other class or any other series of Preferred Stock;
(ix) the conditions or restrictions, if any, upon the creation of
indebtedness of the Corporation or upon the issue of any additional stock
including additional shares of such series or of any other series of Preferred
Stock or any other class of stock; and
(x) any other powers, preferences and relative, participating, optional
and other special rights, and any qualifications, limitations and restrictions
thereof.
Except to the extent otherwise expressly provided in these Articles of
Incorporation or required law(i) no share of Preferred Stock shall have any
voting rights other than those which shall be fixed by the Board of Directors
pursuant to this Article FOURTH and (ii) no share of Common Stock shall have any
voting rights with respect to any amendment to the terms of any series of
Preferred Stock, provided however, that in the case of this clause(ii) the terms
of such series of Preferred Stock, as so amended, could have been established
without any vote of any shares of Common Stock.
3. Effective immediately upon the filing of this Amendment to the
Corporation's Articles of Incorporation, the Corporation shall effect 2.35:1
reverse stock split of all issued and outstanding shares of the Corporation's
$.001 par value Common Stock such that the 5,875,373 shares of Common Stock
currently issued and outstanding shall be reduced automatically to 2,500,000
shares of Common Stock, provided that any and all fractions of shares resulting
from such Reverse Stock Split shall be rounded up to whole shares so that no
fractional shares shall be issued and outstanding.
The number of shares of the Corporation outstanding and entitled to
vote on this Certificate of Amendment to the Articles of Incorporation is
5,875,373, and the said changes and Certificate of Amendment have been consented
to and approved by a majority vote of the stockholders holding at least a
majority of each class of stock outstanding and entitled to vote thereon.
3
<PAGE>
IN WITNESS WHEREOF, the undersigned has executed this Certificate of
Amendment this 30th day of March, 1999 and affirms that this Certificate of
Amendment is the act and deed of the Corporation and the statements made herein
are true under the penalties of perjury.
/s/ Mike M. Mustafoglu
------------------------
Mike M. Mustafoglu,
President and Secretary
STATE OF CALIFORNIA )
) ss:
COUNTY OF LOS ANGELES )
On March 30, 1999 personally appeared before me, a Notary Public, Mike
M. Mustafoglu, who acknowledged that he executed the above instrument.
----------------------
Signature of Notary
4
<PAGE>
CALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT
State of CALIFORNIA
---------------------------------------------
County of LOS ANGELES
---------------------------------------------
On 3/30/99 before me, Nancy Pau, Notary
----------------------------------------------------
Name, Title of Officer, Notary public
personally appeared Mike M. Mustafoglu
-----------------------------------
Mike M. Mustafoglu
/ / personally known to me - OR - /X/ proved to me on the basis of satisfactory
[STAMP-ILLEGIBLE] evidence to be the person whose name is
subscribed to the within instrument and
acknowledged to me that he executed the same
in his authorized capacity, and that by his
signature on the instrument the person, or the
entity upon behalf of which the person acted,
executed the instrument.
WITNESS my hand and official seal.
/s/ Nancy Pau
-----------------------------------
SIGNATURE OF NOTARY
- -----------------------------------OPTIONAL-------------------------------------
Though the data below is not required by law, it may prove valuable to persons
relying on the document and could prevent fraudulent [illegible] of this form.
CAPACITY CLAIMED BY SIGNER DESCRIPTION OF ATTACHED DOCUMENT
/X/ INDIVIDUAL Certif. of Amendment of the
/ / CORPORATE OFFICER Articles of Incorp. of U.S. Medical Group, Inc.
- --------------------------------------------------------------------------------
TITLE(S) TITLE OR TYPE OF DOCUMENT
/ / PARTNERS(S) / / LIMITED 6 PGS.
/ / GENERAL ---------------
NUMBER OF PAGES
/ / ATTORNEY-IN-FACT 3/30/99
/ / TRUSTEE(S) ----------------
/ / GUARDIAN/CONSERVATOR DATE OF DOCUMENT
/ / OTHER:
---------------------
- -------------------------------
- -------------------------------
SIGNER IS REPRESENTING:
NAME OF RESEARCHER OR ENTITY(IES)
- --------------------------------------------------------------------------------
SIGNER(S) OTHER THAN NAMED ABOVE
<PAGE>
Exhibit 3.3
CERTIFICATE AMENDING ARTICLES OF INCORPORATION
OF
U.S. MEDICAL GROUP INC
The undersigned, being President and Secretary of U.S. MEDICAL GROUP
INC. a Nevada Corporation, hereby certify that by majority vote of the Board
of Directors and majority vote of the stockholders at a meeting held on
March 7, 1996, it was agreed by unanimous vote that this CERTIFICATE
AMENDING ARTICLES OF INCORPORATION be filed.
The undersigned further certify that the original Articles of
corporation of U.S. MEDICAL GROUP INC., were filed with the Secretary of State
of Nevada on the 17th day of May 1994. As of the date of this certificate no
stock of the corporation has been issued. The undersigned hereby adopt the
following agreements to the original Articles of Incorporation of this
corporation, Article Fourth herein is amended to read as follows.
ARTICLE FOURTH
FOURTH. This corporation is authorized to issue Twenty-Five Million (25,000,000)
shares of stock as follows Twenty Million (20,000,000) common shares at One
Tenth of One Cent ($.001) par value and Five Million (5,000,000) preferred
shares at One Tenth of One Cent ($.001) par value rights and privileges to be
set by the Board of Directors and no other class of stock shall be authorized.
All or part of the shares of capital stock may be issued by the corporation from
time to time and for such consideration may be determined upon and fixed by the
Board of Directors as provided by law.
<PAGE>
The undersigned hereby certify that they have on this 1st day of March
1996, executed this Certificate Amending, the original Articles of Incorporate
herefore filed with the Secretary of State of Nevada.
/s/ Christopher Jones
-------------------------------------------
Christopher Jones, President and Secretary
State of California )
-------------------------
) SS
County of San Diego )
-----------------------
On this 1st day of March, 1998, before me the undersigned a Notary
Public is and for the County of San Diego, State of California, personally
appeared Christopher Jones, known to be the person whose name is subscribed
to the foregoing Certificate Amending Articles of Incorporation and
acknowledged to me they executed the same.
/s/ Mary E. Dye
------------------------------------
Notary Public
[Official Notary Seal]
(SEAL)
<PAGE>
Exhibit 3.4
U.S. MEDICAL GROUP INC.
BY-LAWS
ARTICLE I MEETINGS OF STOCKHOLDERS
1. Stockholders' Meetings shall be held in the office of the
corporation, at Carson City, NV, or at such other place or places as the
Directors shall from time to time determine.
2. The annual meeting of the stockholders of this corporation shall
be held at 11:00 a.m., on the 13th day of May of each year beginning in 1995, at
which time there shall be elected by the stockholders of the corporation a Board
of Directors for the ensuing year, and the stockholders shall transact such
other business as shall properly come before them.
3. A notice signed by any officer of the corporation or by any person
designated by the Board of Directors, which sets forth the place of the annual
meeting, shall be personally delivered to each of the stockholders of record, or
mailed postage prepaid, at tile address as appears on the stock book of the
company, or if no such address appears in the stock book of the company, to his
last known address, at least ten (10) days prior to the annual meeting. Whenever
any notice whatever is required to be given under any article of these ByLaws, a
waiver thereof in writing, signed by the person or persons entitled to the
notice, whether before or after the time of the meeting of the stockholders,
shall be deemed equivalent to proper notice.
4. If a quorum is not present at the annual meeting, the stockholders
present, in person or by proxy, may adjourn to such future time as shall be
agreed upon by them, and notice of such adjournment shall be mailed, postage
prepaid, to each stockholder of record at least ten (10) days before such date
to which the meeting was adjourned; but if a quorum is present, they may adjourn
from day to day as they see fit, and no notice of such adjournment need be
given.
<PAGE>
5. Special meetings of the stockholders may be called at anytime by
the President; by all of the directors provided there are no more than three, or
if more than three, by any three Directors; or by the holder of a majority share
of the capital stock of the corporation. The Secretary shall send a notice of
such called meeting to each stockholder of record at least ten (10) days before
such meeting, and such notice shall state the time and place of the meeting, and
the object thereof. No business shall be transacted at a special meeting except
as stated in the notice to the stockholders, unless by unanimous consent of all
stockholders present, either in person or by proxy, all such stock being
represented at the meeting.
6. A majority of the stock issued and outstanding, either in person
or by proxy, shall constitute a quorum for the transaction of business at any
meeting of the stockholders.
7. Each stockholder shall be entitled to one vote for each share of
stock in his own name on the books of the company, whether represented in person
or by proxy.
8. All proxies shall be in writing and signed.
9. The following order of business shall be observed at all meetings
of the stockholders so far as is practicable:
a. Call the roll;
b. Reading, correcting, and approving of the minutes of the
previous meeting;
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c. Reports of officers;
d. Reports of Committees;
e. Election of Directors;
f. Unfinished business; and
g. New business.
ARTICLE II STOCK
1. Certificates of stock shall be in a form adopted by the Board of
Directors and shall be signed by the President and Secretary of the
Corporation.,
2. All certificates shall be consecutively numbered; the name of the
person owning the shares represented thereby, with the number of such shares and
the date of issue shall be entered on the company's books.
3. All certificates of stock transferred by endorsement thereon shall
be surrendered by cancellation and new certificates issued to the purchaser or
assignee.
ARTICLE III DIRECTORS
1. A Board of Directors, consisting of at least one (1) person shall
be chosen annually by the stockholders at their meeting to manage the affairs of
the company. The Directors' term of office shall be one (1) year, and Directors
may be re-elected for successive annual terms.
2. Vacancies on the board of Directors by reason of death,
resignation or other causes shall be filled by the remaining Director or
Directors choosing a Director or Directors to fill the unexpired term.
3
<PAGE>
3. Regular meetings of the Board of Directors shall be held at 1:00
p.m., on the 13th day of May of each year beginning in 1995 at the office of the
company at Carson City, NV, or at such other time or place as the Board of
Directors shall by resolution appoint; special meetings may be called by the
President or any Director giving ten (10) days notice to each Director. Special
meetings may also be called by execution of the appropriate waiver of notice and
call when executed by a majority of the Directors of the company. A majority of
the Directors shall constitute a quorum.
4. The Directors shall have the general management and control of the
business and affairs of the company and shall exercise all the powers that may
be exercised or performed by the corporation, under the statutes, the
certificates of incorporation, and the By-Laws. Such management will be by equal
vote of each member of the Board of Directors with each Board member having an
equal vote.
5. A resolution, in writing, signed by all or a majority of the
members of the Board of Directors, shall constitute action by the Board of
Directors to effect therein expressed, with the same force and effect as though
such resolution had been passed at a duly convened meeting; and it shall be the
duty of the Secretary to record every such resolution in the Minute Book of the
corporation under its proper date.
ARTICLE IV OFFICERS
1. The officers of this company shall consist of: a President, one or
more Vice Presidents, Secretary, Treasurer, and such other officers as shall,
from time to time, be elected or appointed by the Board of Directors.
2. The PRESIDENT shall preside at all meetings of the Directors and
the Stockholders and shall have general charge and control over the affairs of
the corporation subject
4
<PAGE>
to the Board of Directors. He shall sign or countersign all certificates,
contracts and other instruments of the corporation as authorized by the Board
of Directors and shall perform all such other duties as are incident to his
office or are required by him by the Board of Directors.
3. The VICE PRESIDENT shall exercise the functions of the President
during the absence or disability of the President and shall have such powers and
such duties as may be assigned to him from time to time by the Board of
Directors.
4. The SECRETARY shall issue notices for all meetings as required by
the By-Laws, shall keep a record of the minutes of the proceedings of the
meetings of the Stockholders and Directors, shall have charge of the corporate
books, and shall make such reports and perform such other duties as are incident
to his office, or properly required of him by the Board of Directors. He shall
be responsible that the corporation complies with Section 78.105 of the Nevada
Corporation Laws and supplies to the Nevada Resident Agent or Registered Office
in Nevada, any and all amendments to the Corporation's Articles of Incorporation
and any and all amendments or changes to the By-Iaws of the Corporation. In
compliance with Section 78.105, he will also supply to the Nevada Resident Agent
or Registered Office in Nevada, and maintain, a current statement setting out
the name of the custodian of the stock ledger or duplicate stock ledger, and the
present and complete Post Office address, including street and number, if any,
where such stock ledger or duplicate stock ledger specified in the section is
kept.
5. The TREASURER shall have the custody of all monies and securities
of the corporation and shall keep regular books of account. He shall disburse
the funds of the corporation in payment of the just demands against the
corporation, or as may be ordered by the
5
<PAGE>
Board of Directors, making proper vouchers for such disbursements and shall
render to the Board of Directors, from time to time, as may be required of him,
an account of all his transactions as Treasurer and of the financial condition
of the corporation. He shall perform all duties incident to his office or which
are properly required of him by the Board of Directors.
6. The RESIDENT AGENT shall be in charge of the corporation's
registered office in the State of Nevada, upon whom process against the
corporation may be served and shall perform all duties required of him by
statute.
7. The salaries of all officers shall be fixed by the Board of
Directors and may be changed from time to time by a majority vote of the Board.
8. Each of such officers shall serve for a term of one (1) year or
until their successors are chosen and qualified. Officers may be re-elected or
appointed for successive annual terms.
9. The Board of Directors may appoint such other officers and agents,
as it shall deem necessary or expedient, who shall hold their offices for such
terms and shall exercise such powers and perform such duties as shall be
determined from time to time by the Board of Directors.
ARTICLE V INDEMNIFICATION OF OFFICERS AND DIRECTORS
1. The corporation shall indemnify any and all of its Directors and
Officers, and its former Directors and Officers, or any person who may have
served at the Corporations request as a Director or Officer of another
corporation in which it owns shares of capital stock or of which it is a
creditor, against expenses actually and necessarily incurred by them in
connection with the defense of any action, suit or proceeding in which they, or
any of them, are made
6
<PAGE>
parties, or a party, by reason of being or having been Director(s) or Officer(s)
of the corporation, or of such other corporation, except, in relation to matters
as to which any such Director or Officer or former Director or Officer or person
shall be adjudged in such action, suit or proceeding to be liable for negligence
or misconduct in the performance of duty. Such indemnification shall not be
deemed exclusive of any other rights to which those indemnified may be entitled,
under By-Law, agreement, vote of stockholders or otherwise.
ARTICLE VI AMENDMENTS
1. Any of these By-Laws may be amended by a majority vote of the
stockholders at any annual meeting or at any special meeting called for that
purpose.
2. The Board of Directors may amend the By-Laws or adopt additional
By-Laws, but shall not alter or repeal any By-Laws adopted by the stockholders
of the company.
CERTIFIED TO BE THE BY-LAWS OF:
U.S. MEDICAL GROUP INC.
BY: /s/ Christopher Jones
--------------------------------
Secretary
7
<PAGE>
Exhibit 10.1
CONSULTING AGREEMENT
Consulting Agreement made this 26th day of April, 1999 by and between
U.S. MEDICAL GROUP Inc., a Nevada corporation with offices at , Orlando, FL (the
"Company") and TransGlobal Financial Corporation., a corporation with offices at
1800 Century Park East, Suite 600, Los Angeles, CA 90067 (the "Consultant").
WITNESSETH:
A. The Company desires to engage the services of the Consultant for
purposes of (i) obtaining consulting and advisory services; (ii) to provide
various strategic planning services and assistance in the implementation thereof
relative to the operations of the Company; and (iii) to assist the Company in
identifying, evaluating and structuring mergers, consolidations, acquisitions,
joint ventures and strategic alliances.
B. Consultant is desirous of performing such services on behalf of
the Company and desires to be engaged and retained by the Company upon the terms
and conditions provided for herein.
NOW, THEREFORE, in consideration of the recitals, promises and
conditions in this Agreement, the Consultant and the Company agree as follows:
1. CONSULTING SERVICES. The Company hereby retains the Consultant on
an exclusive basis, and the Consultant accepts such retention for the following
functions, services and duties:
(a) As mutually determined from time to time by the Consultant
and the Company, during the term specified in paragraph 2 of
this Agreement, the Consultant shall undertake to consult
with and advise the Company, by telephone or in person, as
the Consultant in its sole discretion shall determine, with
respect to financial and business matters, including but not
limited to assistance with fund raising to implement the
Company's business plans, implementation of the Company's
efforts to review capitalization, or pursue mergers,
acquisitions or divestitures and other transactions, on a an
exclusive basis.
(b) Consultant agrees to spend a reasonable amount of time needed
to accomplish its services under this Agreement, and to be
available for telephone calls, meetings and other matters on
as needed basis.
<PAGE>
2. TERM. The term of this Consulting Agreement shall be for a three
(3) year period commencing on the date hereof. The Term will renew in 12-month
increments unless either party notifies the other 90 days prior to the
expiration of the Term of the cancellation of this Agreement.
3. COMPENSATION.
3.1 As full consideration for the services to be provided
pursuant to paragraph 1 of this Agreement (and in addition to the expenses
provided for in paragraph 4 hereof), the Company shall pay Consultant the
following fees:
(a) RETAINER FEE: Waived in view of the Company agreeing to pay
Consultant 575,000 shares of its Common Stock for its merger
and acquisition services in the matter of American Mobile
Services, Inc.
(b) MONTHLY FEE: None.
(c) TRANSACTION FEES -
(i) For financing the Company secures from sources
identified by Consultant, the Company will pay a
cash fee at the closing of such financing.
Transaction Fees for equity financing and debt
financing will an amount equal to seven percent
(7%) and three and one-half percent (3.5%)
respectively of any and all funds committed and
available to the Company.
(ii) In the event that the Consultant represents the
Company with respect to a merger, acquisition,
investment, exchange, or other securities or assets
of the Company and/or a merger or acquisition
candidate, then the Company shall pay the
Consultant a Transaction Fee equal to 10% of the
total market value on the day of the closing of
stock, cash, assets and all other property (real or
personal) exchanged or received, directly or
indirectly by the Company or any of its security
holders in connection with any such transaction.
(iii) In the event the Consultant introduces the Company
to a joint venture partner or customer and sales
develop as a result of the introduction, the
Company hereby agrees to pay a fee of two percent
(2.5%) of the net sales revenue generated directly
from this introduction. Net sales shall be cash
receipts less any applicable refunds, returns,
allowances, credits and shipping charges and monies
paid by the Company by way of settlement or
judgement arising out of claims made by or
threatened against the Company. Commission payments
shall be paid on the 15th day of each month
following the receipt of customers' payment. In the
event any adjustments are made to the total sales
after the commission has been paid, the Company
shall be entitled to an appropriate refund or
credit against future payments under this
Agreement.
3.2 All fees to be paid pursuant to this Agreement, except as
otherwise specified, are due and payable to Consultant at the closing or
closings of any transaction specified in paragraph 3 hereof. In the event that
this Agreement shall not be renewed or if terminated for any reason,
notwithstanding any such non-renewal or termination, Consultant shall be
entitled to a full fee as provided under paragraph 3 and expense reimbursement
as provided in paragraph 4 hereof, for any transaction for which the discussions
were initiated
2
<PAGE>
during the term of this Agreement and which is consummated within a period of
eighteen months after non-renewal or termination of this Agreement.
3.3 The obligation of the Company to pay the fees described in
subparagraph 3 of this Agreement shall be absolute and unconditional as long
Consultant performs its obligations under this Agreement, and shall be payable
without offset, deduction or claim of any kind or character.
3.4 The Company hereby acknowledges and consents that Consultant
may receive additional fees or other compensation from one or more of the
lenders, subscribers, customers, investors or parties to any transaction
described in this Agreement or any sources of funding identified by Consultant,
for various services which may include, in part, services related to this
Agreement.
4. EXPENSES. In addition to the fees payable hereunder, and
regardless of whether any transaction set forth in paragraph 3 hereof is
proposed or consummated, the Company shall reimburse Consultant for Consultant's
travel and out-of-pocket expenses incurred in connection with the services
performed by Consultant pursuant to this Agreement, including without
limitation, hotels, food and associated expenses and long distance calls, but
excluding any expenses incurred by Consultant in connection with any action,
suit or proceeding between Consultant and the Company relating to the services
to be performed by Consultant pursuant to this Agreement.
5. DUTIES OF THE COMPANY.
(a) The Company shall supply the Consultant, on a regular and
timely basis, with all approved data and information about the Company, its
management, its products and its operations, and the Company shall be
responsible for advising the Consultant of any facts which would affect the
accuracy of any prior data and information previously supplied to the Consultant
so that the Consultant may take corrective action.
(b) The Company shall promptly supply the Consultant with: full
and complete copies of all filings with all federal and state securities
agencies; full and complete copies of all stockholder reports and
communications, whether or not prepared with the Consultant's assistance; all
data and information supplied to any analyst, broker-dealer, market maker or
other member of the financial community; and all product/services brochures,
sales materials, etc.
(c) The Company shall promptly notify the Consultant of the
filing of any registration statement for the sale of securities and of any
other event which imposes any restrictions on publicity.
(d) The Company shall contemporaneously notify the Consultant
if any information or data being supplied to the Consultant has not been
generally released or promulgated.
6. REPRESENTATION AND INDEMNIFICATION BY COMPANY.
(a) The Company shall be deemed to make a continuing
representation of the accuracy of any and all material facts, material,
information, and data which it supplies to the Consultant and the Company
acknowledges its awareness that the Consultant will rely on such continuing
representation in disseminating such information and otherwise performing
duties under this Agreement.
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<PAGE>
(b) The Consultant, in the absence of notice in writing from
the Company, will rely on the continuing accuracy of material, information
and data supplied by the Company.
(c) The Company hereby agrees to indemnify the Consultant
against, and to hold the Consultant harmless from, any claims, demands,
suits, loss, damages, etc. arising out of the Consultant's reliance upon the
accuracy and continuing accuracy of such facts, material, information and
data, unless the Consultant has been negligent in fulfilling his duties and
obligations hereunder.
(d) The Company hereby agrees to indemnify the Consultant
against, and to hold the Consultant harmless from, any claims, demands,
suits, loss, damages, etc. arising out of the Consultant's reliance on the
general availability of information supplied to the Consultant and the
Consultant's ability to promulgate such information, unless the Consultant
has been grossly negligent in fulfilling his duties and obligations hereunder.
7. REPRESENTATION AND INDEMNIFICATION BY CONSULTANT.
(a) The Consultant agrees to provide its services hereunder in
a good and workmanlike manner consistent with the performance standards
observed by other professionals undertaking such functions.
(b) The Consultant agrees that it will not release or
disseminate any information pertaining to the Company without providing the
Company with an advance copy thereof and obtaining authorization for such
release and dissemination.
4
<PAGE>
(c) The Consultant hereby agrees to indemnify the Company
against, and to hold the Company harmless from, any claims, demands, suits,
loss, damages, etc. arising out of any inaccurate statement or misrepresentation
provided that such indemnification shall not pertain to any information provided
by or attributable to the Company.
8. RELATIONSHIP OF PARTIES. The Consultant is an independent
contractor, responsible for compensation of its agents, employees and
representatives, as well as all applicable withholding therefrom and taxes
thereon (including unemployment compensation) and all workers compensation
insurance. This Agreement does not establish any partnership, joint venture, or
other business entity or association between the parties, and neither party is
intended to have any interest in the business or property of the other.
9. TERMINATION. This Agreement may not be terminated by either party
prior to the expiration of the term provided in Paragraph 2 above except as
follows:
(a) Upon failure of the other party to cure a material default
under, or a breach of, this Agreement within thirty (30) days after written
notice is given as to such breach by the terminating party;
(b) Upon the bankruptcy or liquidation of the other party,
whether voluntary or involuntary;
(c) Upon the other party taking the benefit of any insolvency
law; and/or;
(d) Upon the other party having or applying for a receiver
appointed for all or a substantial part of such party's assets or business.
10. DISCLAIMER BY CONSULTANT. The Consultant makes no representation
that (a) the price of the Company's publicly-traded securities will increase,
(b) any person will purchase securities in the Company as a result of the
contract, or (c) any investor will lend money to or invest in or with the
Company.
11. NON-ASSIGNABILITY. The rights, obligations and benefits
established by this Agreement shall not be assignable by either party hereto
except with the consent of the other. This Agreement shall, however, be binding
upon and shall inure to the benefit of the parties and their successors.
12. GOVERNING LAW. The terms and provisions of this Agreement shall be
governed by and construed under the laws of the State of Florida.
13. NOTICE. Notice hereunder shall be in writing and shall be deemed
to have been given (a) at the time when deposited for mailing in a receptacle
under the control of the United States Postal Service, by registered or
certified mail, prepaid, return receipt requested, or (b) on
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<PAGE>
the business day following deposit with a reputable overnight courier for
overnight delivery; each addressed to the respective party at the address of
such party first above written or at such other address as such party may fix by
notice given pursuant to this paragraph.
14. NO OTHER AGREEMENTS. This Agreement supersedes all prior
understandings, written or orally given and constitutes the entire Agreement
between the parties hereto with respect to the subject matter hereof. No waiver,
modification or termination of this Agreement shall be valid unless in writing
signed by each of the parties hereto.
IN WITNESS WHEREOF, the parties have hereunto set their hands and seals
the day and year first above written.
U.S. MEDICAL GROUP, INC.
By: /s/ Thomas Winters
-----------------------------------
Name: Thomas Winters
Title: Chief Executive Officer
TRANSGLOBAL FINANCIAL CORPORATION
By: /s/ Mike M. Mustafoglu
-----------------------------------
Mike M. Mustafoglu
President
6
<PAGE>
Exhibit 10.2
FORM OF STOCKHOLDER LOCK-UP AGREEMENT
THIS STOCKHOLDER LOCK-UP AGREEMENT ("Agreement") is made effective
as of March 25, 1999, among American Mobile Surgical Services, Inc., a
Florida corporation ("AMSS"), U.S. Medical Group, Inc., a Nevada corporation
("USMG") and the undersigned stockholder ("Stockholder").
USMG and AMSS are party to an Agreement and Plan of Merger, pursuant to
which AMSS will merge with USMG Acquisition Corp., a Florida corporation and
wholly-owned subsidiary of USMG (the "Merger"). Pursuant to the Merger, holders
of AMSS common stock will receive 10,000,000 shares of USMG common. As a
condition to receipt of the Merger Consideration, each holder of AMSS common
stock is required under the Merger Agreement to execute this Agreement.
As used herein, the term "Restricted Stock" means (i) all USMG common
stock included in the Merger Consideration, (ii) all USMG common stock issued as
a dividend on, or in exchange for or conversion of, the foregoing.
In consideration of the mutual promises, covenants and conditions set
forth below, the parties mutually agree as follows:
1. RESTRICTED STOCK BOUND. All shares of Restricted Stock acquired by
Stockholder in connection with the Merger shall be subject to the terms and
restrictions set forth in this Agreement. No shares of Restricted Stock may be
transferred by Stockholder in any manner except in strict accord with the terms
of this Agreement.
2. LOCK-UP. The Stockholder agrees not to effect any sale or transfer
of the Restricted Stock until the one-year anniversary of the Merger.
3. STOCK HELD BY ESCROW AGENT. To ensure compliance with the terms of
this Agreement, the share certificates representing the Restricted Stock shall
be deposited with Blair & Roach, counsel to USMG, as escrow agent (or a
substitute escrow agent selected by USMG), until the one-year anniversary date
of the Merger.
4. AMENDMENT. This Agreement may be amended or modified only by a
written instrument executed by the parties hereto.
5. WAIVER. Any provision contained in this Agreement may be waived,
either generally or in any particular instance, by TransGlobal Financial
Corporation.
6. SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon and
shall inure to the benefit of the parties and their respective successors and
assigns.
1
<PAGE>
7. GOVERNING LAW. This Agreement shall be governed by the laws of the
State of New York.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first written above.
AMERICAN MOBILE SURGICAL SERVICES, INC., U.S. MEDICAL GROUP, INC.,
a Florida corporation a Nevada corporation
By: /s/ By: /s/
------------------------------------ -------------------------------
Title: Title:
--------------------------------- ----------------------------
2
<PAGE>
Exhibit 10.3
REGIONAL
OFFICE Governor
LAWTON CHILES
Secretary
HARRY K. SINGLETARY,JR.
5700 S.W. 34nd ST., Suite 335 - Gainesville, FL 32608-5373 -
Telephone: (352)955-2035
REGION II
November 19,1997
American Mobile Surgical Services, Inc.
Attn: Sandy Thompson, RN, LHRM
Post Office Box 560699
Orlando, Florida 32856-0699
RE: Contract Number 09208- Cancellation
Mobile Surgery Services- North Florida Reception Center
Dear Ms. Thompson:
This is to advise that the above referenced contract is hereby cancelled
effective midnight November 11,1997. Contract number 09214 became effective
November l2,1997 and replaced the existing contract number 09208.
Mobile surgical services at North Florida Reception Center will continue under
the new contract number 09214.
Sincerely,
J. S. Petrovsky
Regional Director
JSP/JLM /sgr
cc: Bob Torrescano
Steve Smith
Accounting
Comptroller
<PAGE>
CONTRACT # 09214
--------
1/97 AGENT
CONTRACT BETWEEN THE
DEPARTMENT OF CORRECTIONS
AND
AMERICAN MOBILE SURGICAL SERVICES, INC.
This contract is between the Florida Department of Corrections (hereinafter
referred to as the "department") and American Mobile Surgical Services, Inc.
(hereinafter referred to as the "contractor") which are the parties hereto.
WITNESSETH
Whereas, the department is required by Section 945.04, Florida Statutes, to
ensure that all inmates are provided care, custody, treatment, housing and
general handling in accordance with Florida Statutes;
Whereas, it is necessary that budget resources be allocated effectively;
Whereas, this contract is a result of statutory exemption, and;
Whereas, American Mobile Surgical Services, Inc. is a qualified and willing
participant with the department to provide Mobile Surgery services for the
department's inmates.
Now, therefore, in consideration of the agreements contained herein, the parties
agree:
I. CONTRACT TERM/RENEWAL
A. Contract Term
This contract shall be for a term of three (3) years and shall be
effective on October 1, 1997, or the date signed by both parties,
whichever is later. This contract shall end at midnight on
September 30, 2000.
B. Contract Renewal
This contract may be renewed, at the option of the department, for
two (2) additional one (1) year periods) after the initial
contract period upon the same terms and conditions contained
herein and at the renewal prices indicated in Section III,
Compensation. The contract renewal is at the department's sole
discretion and shall be conditioned, at a minimum, on satisfactory
performance evaluations by the department and subject to the
availability of funds. The department, if it desires to renew this
contract, shall exercise its option no later than sixty (60) days
prior to the contract expiration.
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<PAGE>
CONTRACT #
--------------------
II. SCOPE OF CONTRACT
A. Administrative Functions
The department will not furnish support services (e.g., support
staff, office space, telephone services, secretarial or clerical
support) to the contractor.
B. Responsibilities of the Contractor:
American Mobile Surgical Services, Inc. will provide on-site
surgical, services. Contractor agrees to meet all State and
regulatory requirements. AMSSI (American Mobile Surgical Services
Inc.) will provide a Mobile Surgica.l Unit at North Florida
Reception Center including all equipment, instrumentation and
supplies. AMSSI will provide staff within the unit to include one
Operating Room Supervisor/Circulator and one Surgical
Technician.( NFRC will provide one Registered Nurse for the
Recovery Room and one Registered Nurse for the Pre-op Area. In
addition, NFRC will provide linen services, utilities, and
laboratory services such as, stat labs and pathology.) AMSSI will
provide all types of surgery including General, Orthopedic,
Colorectal, ENT, Podiatry and Urology.
C. Department Responsibilities:
1. The department will provide, at its expense and judgment, a
sufficient number of Correctional Officers to supervise those
inmates receiving services by the contractor
2. Clinical issues involving medical care rendered by the
contractor shall be resolved jointly by the contractor and
the Regional Health Services Director, Region II.
3. The department will provide the contractor with access to all
department rules and regulations. In addition, any changes
impacting the contractor and how services are delivered will
be made available to the contractor
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<PAGE>
CONTRACT #
--------------------
III. COMPENSATION
A. Payment
The department will compensate the contractor at the following
rates:
Compensation per the attached fee schedule. All surgeries
in excess of fifty(SO) in each month will be billed at a
10% discountfrom these rates. These charges do not include
the cost of the Durable Medical Products such as hardware
used in some of the procedures. There will be a separate
charge for such hardware.
B. Submission of Invoice(s)
The contractor agrees to submit invoices for compensation for
services in detail sufficient for a proper preaudit and postaudit
thereof, as follows:
a) Contractor's name and mailing address
b) Date service rendered
c) Inmate number
d) Inmate name
e) Name of facility
f) Service rendered
g) IRS number
h) Amount of charges as per contract.
The contractor shall submit invoices pertaining to this contract
to:
Bob Torrescano, Hospital Administrator
Florida DepartmentofCorrechons
Post Office Box 628
Lake Butler, Florida 32054
(904) 496-6111
C. Official Payee
The name and address of the official payee to whom payment shall
be made is as follows:
American Mobile Surgical Services, Inc
Sandy Thompson, RN, LHRM
P. O. Box 560699
Orlando, Florida 3Z8S&0699
(407) 849-2288
3
<PAGE>
CONTRACT #
--------------------
D. Travel Expenses
The department shall not be responsible for the payment of any
travel expense for the contractor.
E. Contractor's Expenses
The contractor shall pay for all licenses, permits, and inspection
fees or similar charges required for this contract, and shall
simply comply with all laws, ordinances, regulations and any other
requirements applicable to the work specified.
F. Annual Appropriation
The State of Florida's performance and obligation to pay under
this contract is contingent upon an annual appropriation by the
Legislature. The costs of services paid under any contract or from
any other source are not eligible for reimbursement under this
contract.
G. Tax Exemption
The department agrees to pay for contracted services according to
the conditions of this contract. The State of Florida does not pay
Federal Excise and Sales taxes on direct purchases of services.
H. Interest Penalties
Payment shall be made in accordance with Section 215.422, Florida
Statutes, which states the contractors rights and the department's
responsibilities concerning interest penalties and thmne limits
for payment of invoices.
I. Timeframes for Payment
Vendors providing goods and services to an agency should be aware
of the following time frames:
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<PAGE>
CONTRACT #
--------------------
1. Upon receipt, an agency has five (5) working days to inspect
and approve the goods and services and associated invoice,
unless the bid specifications, purchase order or contract
specifies otherwise. An agency has twenty (20) ,daysto
deliver a request for payment(voucher)to the Department of_Bg
and Finance. The twenty(20) days are measured from the latter
of the date the invoice is received or the goods or services
are received, inspected and approved.
2. If a payment is not available within forty (40) days, a
separate interest penalty, as specified in Section 215.422,
Florida Statutes, will be due and payable, in addition to the
invoice amount, to the vendor. The interest penalty_provision
applies after a thirty-five (35) day time period to health
care providers, as defined by rule. Interest penalties of
less than one (1) dollar will not be enforced unless the
vendor requests payment. Invoices which have to be returned
to a vendor because of vendor preparation errors will result
in a delay in the payment. The invoice payment requirements
do not start until a properly completed invoice is provided
to the agency.
J. Final Invoice
The contractor shall submit the final invoice for payment to the
department no more than forty-five (45) days after acceptance of
the final deliverable by the department. If the contractor fads to
do so, all right to payment is forfeited, and the department will
not honor any request submitted after aforesaid time period. Any
payment due under the terms of the contract may be withheld until
all applicable deliverables and invoices have been accepted and
approved by the department.
K. Vendor Ombudsman
A Vendor Ombudsman has been established within the Department of
Banking and Finance. The duties of this individual include acting
as an advocate for vendors who may be experiencing problems in
obtaining timely payment(s) from a state agency. The Vendor
Ombudsman may be contacted at (904) 488-2624 or by calling the
State Comptroller's Hotline, 1-800-848-3 792.
IV. CONTRACT MANAGEMENT
The department has assigned the following named individuals, address
and phone number as indicated, as Contract Manager and Contract
Administrator.
A. The Contract Manager:
The Contract Manager for this contract will be:
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<PAGE>
CONTRACT #
--------------------
Bob Torrescano, Hospital Administrator
North Florida Reception Center
Post Offrce Box 628
Lake Butler, Florida 32054
The Contract Manager will perform the following functions:
a. Serve as the liaison between the department and the
contractor
b. Receive and distribute deliverables from the contractor
c. Monitor the progress of the contractor
d. Meet with the contractor at least twice annually to evaluate
the contractor's performance
e. Review, verify, and approveinvoicesfrom the contractor
f. Evaluate contractor performance upon completion of the
contract. This evaluation will be placed on file and will be
used if the contract is subsequently used as a reference in
fixture procurements.
B. The Contract Administrator:
The Contract Administrator for this contract will be:
Jerry Pilcher, Director ofAdministrahon
5700 S. W. 34th Street, Suite 335
Gainesville, Florida 32608-53 73
(352) 955-2035
The Contract Administrator will perform the following functions:
a. Maintain the contract file
b. Process all contract amendments, renewals, and termination
ofthe contract.
c. Maintain the official records of all correspondence between
the department and the contractor
C. Contractor's Representative
The name, address and telephone number of the representative of
the contractor responsible for administration ofthe program under
this contract is:
American Mobile Surgical Services, Inc.
Sandy Thompson,RN,LHRM
P. O. Box 560699
Orlando, Florida 32850699
(407) 849-2288
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<PAGE>
CONTRACT #
--------------------
D. Changes to Designees
In the event that different representatives are designated by
either party after execution of this contract, notice of the name
and address of the new representatives will be rendered in writing
to the other party and said notification attached to originals of
this contract.
V. CONTRACT MODIFICATIONS
Modifications to provisions of this contract shall ony be valid when
they have been rendered in writing and duly signed by both parties. The
parties agree to renegotiate this contract if stated revisions of any
applicable laws, regulations or increases/decreasesin allocations make
changes to this contract necessary. There are no obligations to agree
by either party.
VI. TERMINATION/CANCELLATION
A. TERMINATION AT WILL
This contract may be terminated by either party upon no less than
thirty (3 0) calendar days notice, without cause, unless a lesser
time is mutually agreed upon by both parties. Said notice shall be
delivered by certified mail (return receipt requested) or in
person with proof of delivery.
B. Termination Because of Lack of Funds
In the event funds to finance this contract become unavailable,
the department may terminate the contract upon no less than
twenty-four (24) hours notice in writing to the contractor. Said
notice shall be delivered by certified mail, return receipt
requested, or in person with proof of delivery. The department
shall be the final authority as to the availability offends for
this contrast.
C. Termination for Breach
If a breach of this contract occurs by the contractor, the
department may by written notice to the contractor, terminate this
contract upon twenty-four (24) hours notice. Said notice shall be
delivered by certified mad (return receipt requested) or in person
with proof of delivery. If applicable, the department may employ
the default provisions
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<PAGE>
CONTRACT #
--------------------
in Chapter 60A 1, Florida Administrative Code. The provisions
herein do not limit the department's right to remedies at law or
to damages.
D. Termination for Unauthorized Employment
Violation of the employment provision as determined pursuant to
Section 274A(e), Immigration and Nationality Act, shall be grounds
for unilateral cancellation of this contract.
V11. CONDITIONS
A. Records
1. The contractor agrees to maintain books, records and
documents (including electronic storage media) in accordance
with generally accepted accounting procedures and practices
which sufficiently and properly reflect all revenues and
expenditures offends provided by the department under this
contract, to provide a financial and compliance audit to the
department and to ensure that all related party transactions
are disclosed to the auditor.
2. The contractor agrees to include these aforementioned audit
and record keeping requirements in all approved subcontracts
and assignments.
3. The contractor agrees to maintain and file with the
department such progress, fiscal and inventory reports as
specified in Section II, and other reports as the department
may require within the period of this contract.
4. The contractor agrees to retain all went records, financial
records, supporting documents, statistical records, and any
other documents (including electronic storage media)
pertinent to this contract for a period of seven(7) year
after termination of the contract, or if an audit has been
initiated and audit findings have not been resolved at the
end of seven (7) years, the records shall be retained unto
resolution of the audit findings. The contractor will
cooperate with the department to facilitate the duplication
and transfer of any sued records or documents during the
required retention period.
5. Monitoring persons duly authorized by the department and
auditors shall have the right to examiine any of sued records
and documents at all reasonable times during said retention
period or as long as records are retained, whichever is
later, including any records, papers, documents, facilities
relevant to this contract. Following such inspection the
department will deliver to the contractor a list of its
comments with regard to the manner in which said goods or
services are being provided. The
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<PAGE>
CONTRACT #
--------------------
contractor will rectify all noted deficiencies provided by
the department within the specified period of time set forth
in the comments or provide the department with a reasonable
and acceptable justification for not correcting the noted
shortcomings.
The contractor's failure to correct or justify within a
reasonable time as specified by the department may result in
the withholding of payments, being deemed in breach or
default, or termination of this contract.
6. The contractor agrees to allow public access to all
documents, papers letters, or other materials subject to the
provisions of Chapter 119, F.S., and made or received by the
contractor in conjunction with this contract. It is expressly
understood that substantial evidence of the contractor's
refusal to comply with this provision shall constitute a
breach of contract.
B. Prison Rehabilitative Industries and Diversified Enterprises
(PRIDE)
The contractor agrees that any articles which are the subject of,
or are required to carry out this contract shall be purchased from
Prison Rehabilitative Industries and Diversified Enterprises, Inc.
(PRIDE) identified under Chapter 946, F.S., in the same manner and
under the procedures set forth in subsections 946.515(2) and (4).
For purposes of this contract, the contraktor shall be deemed to
be substituted for the department insofar as dealings with PRIDE.
This clause is not applicable to subcontractors, unless otherwise
required by law. Available product, pricing and delivery schedules
may be obtained by contacting:
Terrie Brooks, Bid Administrator
PRIDE of Florida
2720 Blair Stone Road, Suite G
Tallahassee, Florida 32301
Telephone: (904)487-3774
C. Procurement of Materials with Recycled Content
It is expressly understood and agreed that any products or
materials which are the subject of, or are required to carry out
this contract shall be procured in accordance with the provisions
of Section 403.7065 and Section 287.045, Florida Statutes.
D. Sponsorship
If the contractor is a nongovernmental organization which sponsors
a program financed wholly or in part by state funds, including any
funds obtained through this contract, it shall, in publicizing,
advertising or describing the sponsorship of the program, state:
"Sponsored by (contractor's rurme) and the State of Florida,
Department of Corrections." If the sponsorship reference is in
written material, the
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<PAGE>
CONTRACT #
--------------------
words "State of Florida, Department of Corrections" shall appear
in the same size letters or type as the name of the organization.
E. Employment of Department Personnel,
The contractor shall not knowingly engage in this project, on a
full time, part time, or other basis during the period of this
contract, any current or former employee of the department where
such employment conflicts with Section 112.3185, Florida Statutes.
F. Non-Discrimination During the performance of this contract the
contractor will not discriminate against any employee or applicant
for employment because of age, sex, race, creed, color or national
origin. The contractor will take affirmative action to ensure that
applicants, clients and employees are treated without
discrimination regarding their age, sex, race, creed, color, or
national origin. The contractor agrees to post in conspicuous
places, available to employees and applicants for employment,
notices setting forth the provisions of this non-discrimination
clause. In addition, the contractor shall comply with the
Americans with Disabilities Act. In the event of the contractor's
noncompliance with the nondiscrimination clauses, the Americans
with Disabilities Act, or with any other such rules, regulations,
or orders, this contract may be canceled, terminated or suspended
in whole or in part and the contractor may be declared ineligible
for further contracts.
G. Indemnification
The contractor shall be liable, and agrees to be liable for, and
shall indemnify, defend and hold the department harmless from all
claims, suits, judgments or damages including court costs and
attorney's fees arising out ofintentionalacts, negligence or
omissions by the contractor in the course of the operations of his
contract up to the limits of liability set forth in Section
768.28, Florida Statutes.
H. Contractor's Insurance
The contractor warrants that he/she is, and shall remain for the
term of this contract, in compliance with the financial
responsibility requirements of Section 45 8.320, Florida Statutes,
and is not entitled to, and shall not claim, any exemption from
such requirements. The contractor also warrants that funds held
under Section 45 8.320,
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<PAGE>
CONTRACT #
--------------------
Florida Statutes, are available to pay claims against the State in
accordance with the preceding paragraph, subsection G,
Indemnification
The contractor agrees to provide adequate liability insurance
coverage to the extent of liability under Section 768.28, Florida
Statutes, on a comprehensive basis and to hold such liability
insurance at all times during the existence of this contract. Upon
the execution of this contract, the contractor shall furnish the
department written verification supporting both the determination
and existence of such insurance coverage. Such coverage may be
provided by a self-insurance program established and operating
under the laws of the State of Florida. The department reserves
the right to require additional insurance where appropriate. If
the contractor is a state agency or subdivision as defined in
Section 768.28, Florida Statutes, the contractor shall furnish the
department, upon request, written verification of liability
protection in accordance with Section 768.28, Florida Statutes.
Nothing herein shall be construed to extend any party's liability
beyond that provided in Section 768.28, Florida Statutes.
I. Copyrights and Right to Data
Where activities supported by the contract produce original
writing, sound recordings, pictorial reproductions, drawings or
other graphic representation and works of any similar nature, the
department has the right to use, duplicate and disclose such
materials in whole or in part, in any manner, for any purpose
whatsoever and to have others acting on behalf of the department
to do so. If the materials so developed are subject to copyright,
trademark, or patent, legal title and every right, interest, claim
or demand of any kind in and to any patent, trademark or
copyright, or application for the same, will vest in the State of
Florida, Department of State for the exclusive use and benefit of
the state. Pursuant to Section 286.021, Florida Statutes, no
person, firm or corporation, including parties to this contract,
shall be entitled to use the copyright, patent, or trademark
without the prior written consent of the Department of State.
The department shall have unlimited rights to use, disclose or
duplicate, for any purpose whatsoever, all information and data
developed, derived, documented, or furnished by the contractor
under this contract. All computer programs and other documentation
produced as part of the contract shall become the exclusive
property of the State of Florida, Department of State and may not
be copied or removed by any employee of the contractor without
express written permission of the department.
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CONTRACT #
--------------------
J. Disputes
Any dispute concerning performance of the contract that cannot be
resolved informally shall be reduced to writing and delivered to
the department's Contract Manager. The Contract Manager shall
decide the dispute, reduce the decision to writing, and deliver a
copy to the contractor.
K. Agent of the Department
In the contractor's performance of its duties and responsibilities
under this contract, it is mutually understood and agreed that the
contractor is at all times acting and performing as an agent of
the Department of Corrections but not as an employee of the State
of Florida, Department of Corrections. The department shall
neither have nor exercise any control or direction over the
methods by which the contractor shall perform its work and
functions other than as provided herein.
Nothing in this contract is intended to, nor shall be deemed to
constitute, a partnership or a joint venture between the parties.
L. Subcontracts
The contractor is fully responsible for all work performed under
this contract. The contractor may, with the consent of the
department, enter into written subcontracts) for performance of
certain of its functions under the contract. Subcontracts shall be
approved, in writing, by the department Contract Manager prior to
the effective date of any subcontract. No subcontract which the
contractor enters into with respect to performance under the
contract shall in any way relieve the contractor of any
responsibility for performance of its duties. All payments to
subcontractors shall be made by the contractor. No payment to the
contractor will be processed until all subcontracts are approved,
in writing, by the department.
M. Assignment
The contractor agrees to neither assign the responsibility of this
contract to another party nor subcontract for any of the work
contemplated under this contract without prior written approval
ofthe department.
N. Payment of Subcontractors
If a subcontractor is approved by the department, payments made by
the contractor to the subcontractor must be within seven (7)
working days after
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CONTRACT #
--------------------
receipt of full or partial payments from the department in
accordance with Section 287.05 85, Florida Statutes. Failure to
pay within seven (7) working days will result in a penalty charged
against the contractor and paid to the subcontractor in the amount
of one-half of one (1) percent of the amount due, per day from the
expiration of the period allowed herein for payment. Such penalty
shall be in addition to actual payments owed and shall not exceed
fifteen (15) percent of the outstanding balance due.
O. Force Majeure
Neither party shall be liable for loss or damage suffered as a
result of any delay or failure in performance under this agreement
or interruption of performance resulting directly or indirectly
from acts of God, civil or military authority, acts of public
enemy, war, riots, civil disturbances, insurrections, accidents,
fire, explosions, earthquakes, floods, water, wind, lightning,
strikes, labor disputes, shortages of suitable parts, materials,
labor or transportation to the extent such events are beyond the
reasonable control of the party claiming excuse from liability
resulting therefrom.
P. Severability
The invalidity or unenforceability of any particular provision of
this contract shall not affect the other provisions hereof and
this contract shall be construed in all respects as if such
invalid or unenforceable provision was omitted.
Q. Use of Funds for Lobbying, Prohibited
The contractor agrees to comply with the provisions of Section
216.347, Florida Statutes, which prohibits the expenditure of
state funds for the purpose of lobbying the legislature or a state
agency.
R. Patents and Royalties
The contractor, without exception, shall indemnify and save
harmless the department and its employees from liability of any
nature or kind, including cost and expenses for or on account of
any copyrighted, patented, or unpatented invention, process, or
article manufactured or supplied by the contractor. The contractor
has no liability when such claim is solely and exclusively due to
the combination, operation or use of any article supplied
hereunder with equipment or data not supplied by the contractor or
is based solely and exclusively upon the department's alteration
of the article. The department will provide prompt written
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CONTRACT #
--------------------
notification of a claim of copyright or patent infringement and
will afford the contractor full opportunity to defend the action
and control the defense. Further, if such a claim is made or is
pending, the contractor may, at its options and expenses procure
for the department the right to continue use of, replace or modify
the article to render it noninfringing (if none of the
alternatives are reasonably available, the department agrees to
return the article on request to the contractor and receive
reimbursement, if any, as may be determined by a court of
competent jurisdiction). If the contractor uses any design,
device, or materials covered by letter, patent or copyright, it is
mutually agreed and understood without exception that the contract
prices shall include all royalties or cost arising from the use of
such design, device or materials in any way involved in the work..
S. Verbal Instructions
No negotiations, decisions, or actions shall be initiated or
executed by the contractor as a result of any discussions with any
department employee. Only those communications which are in
writing from the department's administrative or project staff
identified in section VII, Contract Management, of this contract
shall be considered as a duly authorized expression on behalf of
the department. Only communications from the contractor which are
signed and in writing will be recognized by the department as duly
authorized expressions on behalf of the contractor.
T. No Prior Involvement/Conflict of Interest
No officer or employee of the department shall receive any
compensation whatsoever, directly or indirectly, for any act or
service which he/she may do or perform for or on behalf of any
officer or employee or agency, or employee of a contractor; nor
shall any officer or employee of the department or the state be
interested, directly or indirectly, in any contract or purchase
made, or authorized to be made, by anyone for or on behalf of the
department.
U. State Licensing Requirements
All corporations and not for profit corporations seeking to do
business with the State of Florida shall be on file with the
Florida Department of State in accordance with the provisions of
Chapter 607 or 617, Florida Statutes, similarly, partnerships
seeking to do business with the State of Florida shall have
complied with the applicable provisions of Chapter 620, Florida
Statutes, and set forth the particular reasons) therefore. A
statement shall be required indicating that the contractor is a
corporation or other legal entity. If subcontractors are used, a
statement shall also be required indicating that all
subcontractors are registered with the State of
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CONTRACT #
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Florida in accordance with Chapter 607, 617 or 620, Florida
Statutes, providing their corporate charter numbers.
V. Public Entity Crimes Information Statement
A person or affiliate who has been placed on the convicted vendor list
following a conviction for a public entity crime may not submit a bid
on a contract to provide any goods or services to a public entity, may
not submit a bid on a contract with a public entity for the
construction or repair of a public building or public work, may not
submit bids on leases of real property to a public entity, may not be
awarded or perform work as a contractor, supplier, subcontractor, or
consultant under a contract with any public entity, and may not
transact business with any public entity in excess of the threshold
amount provided in Section 287.017, for CATEGORY TWO for a period of 36
months from the date of being placed on the convicted vendor list.
Waiver of breach of any provision of this contract shall not be deemed to be a
waiver of any other breach and shall not be construed to be a modification of
the terms of this contract.
This contract will be governed by and construed in accordance with the laws of
the State of Florida.
This Contract contains all the terms and conditions agreed upon by the parties.
IN WITNESS THEREOF, the parties hereto have caused this contract to be executed
by their undersigned officials as duly authorized.
CONTRACTOR: STATE OF FLORIDA
DEPARTMENT OF CORRECTIONS
SIGNED SIGNED
BY: /s/ Daniel R. Williams BY: /s/ J.S. Petrovsky
NAME: Daniel R. Williams NAME: J. S.Petrovsky
TITLE: Chief Financial Officer TITLE: Regional Director, Region II
Department of Corrections
DATE: Sept. 8, 1997 DATE: 11/12/97
Contractor's FElD # ###-##-####
--------------
15
<PAGE>
Contract No.09214
AMENDMENT#1
CONTRACT AMENDMENT BETWEEN THE
DEPARTMENT OF CORRECTIONS
AND
AMERICAN MOBILE SURGICAL SERVICES, INC.
This is an Amendment of the contract by and between the Department of
Corrections and American Mobile Surgical Services, Inc. being the same parties
who entered into the contract dated November 12. 1997 to provide Mobile Surgery
services for the department's inmates.
The contract shall be amended as follows: The name of the corporation is changed
to U.S. Medical Group d/b/a American Mobile Surgery Services. The medical staff
Performing surgery within the unit are contract employees of the Department of
Corrections. Credentialling of providers is completed by the Department of
Corrections. The Department of Corrections maintains responsibility for
infection control, risk management, and quality assurance. The Department of
Corrections will be responsible for the disposal of bio-medical waste generated
within the Mobile Surgery Unit.
All other terms and conditions of the original contract and subsequent
modifications and renewals remain in full force and effect.
In witness whereof, the parties hereto have caused this amendment to be executed
by their undersigned officials as duly authorized.
CONTRACTOR: STATE OF FLORIDA
U.S. Medical Group d/b/a DEPARTMENT OF CORRECTIONS
American Mobile Surgery Services
SIGNED SIGNED
BY: /s/ Thomas Winters BY: /s/ C. George Denman
TYPED/PRINTED TYPED/PRINTED
NAME: Thomas Winters NAME: C. George Denman
TITLE: President CEO TITLE: Regional Director- Region II
DATE: 7/23/99 DATE:
CONTRACTORFEID#
Contractor Phone (407) 849-2288
--------------
Contractor Fax (407) 849-6412
--------------
<PAGE>
09214
Amendment # 1
CONTRACT AMENDMENT BETWEEN THE
DEPARTMENT OF CORRECTIONS
AND
AMERICAN MOBILE SURGICAL SERVICES, INC.
This is an amendment to the contract between the Florida Department of
Corrections and American Mobile Surgical Services, Inc.to provide Mobile Surgery
services for the department's inmates.
This amendment:
- changes the name of the contractor pursuant to Section V.,
Contract Modifications;
- revises Section H., C. Department Responsibilities to include
credentialling of providers and responsibility for infection
control, risk management, quality assurance, and the disposal of
bio-medical waste;
- changes the name of the contractor pursuant to Section III., C.
Official Payee;
- revises the area code of the Vendor Ombudsman referenced in
Section III., K. Vendor Ombudsman;
- revises the Contract Administrator referenced in Section IV., B.
The Contract Administrator;
- revises the area code of the Bid Administrator referenced in
Section VII, B. Prison Rehabilitative Industries and Diversified
Enterprises (PRIDE);
- revises the Sponsorship referenced in Section VII, D. Sponsorship;
In accordance with Section V, Contract Modifications the following changes are
hereby made:
1. The name of the contractor is changed from American Mobile Surgery
Services to U.S. Medical Group d/b/a American Mobile Surgery Services.
2. Section H., C. Department Responsibilities is revised to read:
II. C. Department Responsibilities
1. The department will provide, ants own expense and discretion,
a sufficient number of Correctional Officers to supervise
those inmates receiving services from the contractor.
2. Clinical issues involving medical care rendered by the
contractor shall be resolved jointly by the contractor and
the Regional Health Services Director, Region II.
3. The department will provide the contractor with access to all
department rules and regulations. In addition, any written
changes impactingthe contractor and how services are
delivered will be made available to the contractor.
4. The medical staff performing surgery within the unit are
considered contract employees of the Department of
Corrections. Credentialling of providers shall be completed
by the Department of Corrections.
Page 1 of 3
<PAGE>
09214
Amendment # 1
5. The Department of Corrections maintains responsibility for
infection control, risk management, and quality assurance.
The Department of Corrections will be responsible for the
disposal of bio-medical waste generated within the Mobile
Surgery Unit.
3. Section III., C. OFFICIAL PAYEE, second paragraph is revised to
read:
III. C. Official Payee
U.S. Medical Group
Sandy Thompson, RN, LHRM
P. 0. box 560699
Orlando, FL 32856-0699
4. Section III, K. VENDOR OMBUDSMAN, last sentence is revised to
read:
III. K. Vendor Ombudsman
The Vendor Ombudsman may be contacted at (850)488-2624 or by calling
the State Comptroller's Hotline, 1-800-848-3 792.
5. Section IV, B. THE CONTRACT ADMINISTRATOR, first paragraph is
revised to read:
IV. B. The Contract Administrator
The Contract Administrator for this contract will be:
Gus Hubert, Administrative Services Director
Department of Corrections
Gainesville Service Center
4127 TW 270 Lane
Gainesville, FL 32606
(352)955-6506
6. Section VII, B. PRISON REHABILITATIVE INDUSTRIES AND DIVERSIFIED
ENTERPRISES PRIDE), the last sentence is revised to read:
VII. B. PRISON REHABILITATIVE INDUSTRIES AND DIVERSIFIED ENTERPRISES
(PRIDE)
Available products, pricing and delivery schedules may be obtained by
contacting:
Terrie Brooks, Bid Administrator
PRIDE of Florida
2720 Blair Stone Road, Suite G
Tallahassee, Florida 32301
Telephone: (850)487-3774
Page 2 of 3
<PAGE>
09214
Amendment # 1
7. Section VII, D. SPONSORSHIP, the first sentence is revised to read:
VII D. Sponsorship
If the contractor is a nongovernmental organization which sponsors a
program financed wholly or in part by state funds, including any funds
obtained through this contract, it shall, in publicizing, advertising
or describing the sponsorship of the program, state: "Sponsored by U.S.
Medical Group d/b/a American Mobile Surgical Services, Inc. and the
State of Florida, Department of Corrections."
This amendment shall begin on the date on which it is signed by both parties.
All other terms and conditions of the original contract and previous amendments
remain in full force and effect. In witness thereof, the parties hereto have
caused this amendment to be executed by their undersigned officials as duly
authorized.
CONTRACTOR: STATE OF FLORIDA
U.S. MEDICAL GROUP D/B/A DEPARTMENT OF CORRECTIONS
American Mobile Surgery Services
SIGNED SIGNED
BY: /s/ Sandra L. Thompson BY: /s/ Michael W. Moore
NAME: Sandra L. Thompson NAME: Michael W. Moore
TITLE: CEO TITLE: Secretary
Department of Corrections
DATE: 12/29/99 DATE: 1/7/00
FEID # 61-009274 APPROVED AS TO FORM AND
LEGALITY SUBJECT TO
EXECUTION BY THE PARTIES
------------------------
Louis A. Vargas
General Counsel
Department of Corrections
Page 3 of 3
<PAGE>
Exhibit 10.4
Department of Correction
PURCHASING SECTION
4227 MSC
RALEIGH, NC 27699-4220
NC DEPARTMENT OF CORRECTION
PH 919-716-3300
2020 YONKERS RD
4220 MSC
RALEIGH, NC 27699-4220
TO: AMERICAN MOBILE SURGICAL SVCS
1405 S ORANGE AVE
ORLANDO FL 32606
DATE PRINTED
08/27/1999
- -----------
SHIP VIA
STATE OF NORTH CAROLINA
PURCHASE ORDER PAGE
4250016451
- ------------
BLANKET RELEASE
CHANGE NOTICE
SHP
TO
CORRECT PURCHASE ORDER AND STOCK NUMBERS MUST APPEAR ON ALL PACKAGES, INVOICES,
SHIPPING PAPERS AND CORRESPONDENCE. PACKING SLIPS MUST ACCOMPANY ALL SHIPMENTS.
SEE REVERSE SIDE FOR ADDITIONAL INSTRUCTIONS
DIV OF PRISONS ADMIN. 2005
NC DEPARTMENT OF CORRECTION
831 WEST MORGAN STREET
RALEIGH, NC
27603-0940 919-733-3226
TERMS OF SALE
NET 30 0.00
F.O.B. FREIGHT TERMS ADDITIONAL COST
<PAGE>
TAX CERTIFICATION NUMBER TAX ITEM NUMBER
THIS PURCHASE ORDER IS ISSUED IN CONJUCTION WITH IFB*42000283, MOBILE OPERATING
ROOM/SVCS, P&C*802779.
THIS IS A ONE YEAR AGREEMENT WITH THE OPTION TO RENEW AN ADDITIONAL FOUR YEARS
IN ONE YEAR INCREMENTS.
THE EFFECTIVE DATE OF THIS AGREEMENT IS ON OR ABOUT OCTOBER 15, 1999 THROUGH
OCTOBER 14, 2000.
1 EA G21864 1,512,720.0000 1,512,720.00
11/01/1998
OPERATING ROOM TRUCK FOR CP
FISCAL YEAR OCTOBER 15, 1999 THROUGH JUNE 30, 2000
BUYER: SIDRA OWNES TOTAL: $1,512,720.00
PHONE: 919-716-3250
ORIGINAL
<PAGE>
[GRAPHIC OMITTED]
PROUD SPONSOR 1-888-767-1999
North Carolina Department of Correction
Division of Departmental Purchasing & Services
2020 Yonkers Road - Post Office Box 29540 - Raleigh, N.C. 27626-0540
Phone: (919)716-3250 Fax: (919)716-3983 or (919)716-3984
Larry A. Rhodes, Director
James B. Hunt Jr., Governor July 7,1999 Theodis Beck, Secretary
AMERICAN MOBILE SURGICAL SVCS
1405 S ORANGE AVE
ORLANDO, FL 32806
RE: Readiness for Year 2000
Dear AMERICAN MOBILE SURGICAL SVCS:
The purpose of this letter is to inform you that the Division of Departmental
Purchasing & Services is currently modifying software, hardware and equipment
with embedded microchips to be ready for the century date change in the Year
2000. Hopefully, you are also working on Year 2000 issues and will be able to
continue to supply Department of Correction in the new century.
As we all know, preparation for the Year 2000 includes contacting all essential
suppliers and vendors to determine how they are handling Year 2000 readiness for
their own organizations. The enclosed questionnaire was developed for that
purpose. Please take the time to complete the questionnaire and fax it to
(919)716-3983 by August 5,1999sothat we will have a better idea of the status of
your Year 2000 planning and implementation. [This will help us plan for
contingencies.]
In working together I feel that we can avoid any interruption in services due to
the Year 2000 problem. Your cooperation in this matter is greatly appreciated.
Sincerely,
Larry A. Rhodes
Director
An Equal Opportunity/Affirmative Action Employer
<PAGE>
PLEASE ANSWER THE FOLLWING QUESTIONNAIRE AND RETURN BY AUGUST 5,1999
NORTH CAROLINA DEPARTMENT OF CORRECTION DEPARTMENTAL PURCHASING &SERVICES
2020YONKERSROAD 4227MSC RALEIGH, NC 27699-4227 FAX: (919)716-3983
1. Has your company established a group or committee to be responsible for
Y2K compliance across your entire company? Y N
2. Does this committee communicate its findings on a regular basis to
senior managemeat? Y N
3. Have you completed an inventory of all your software, hardware and
equipment with embedded microprocessing chips? Y N
4. Have you completed an assessment on this inventory? Y N
5. Are you monitoring critical vendors, clients, and other thud parries to
ensure that the will be ready for Y2K? Y N
6. Has the committee developed a comprehensive Y2K plan to address all
hardware, software, systems and embedded microprocessor chips that need
to be made ready for Y2K? Y N
1. At what state is the implementation of your company's Y2K readiness
plan?
Initial awareness/assessment process begun
Plan for correction of non ready systems begun
Post correction testing underway
Y2Kcompliant
8. What is your expected target date for Y2K compliance? ___/__ /___
9. Have you developed contingency plans in the event that you do not make
your target date? Y N
Signed:
Organization
By: [Please print and sign name]
Title
Mailing address
<PAGE>
Phone number Fax number
E-mail address
Date
<PAGE>
GENERAL CLARIFICATIONS TO THE TECHNICAL REQUIREMENTS:
SECTIONS. SCOPE OF SERVICES:
A.1 One completely equipped operating room Will Comply
A.2. Completely equipped recovery room configured to accommodate up to 3
patients at any given time. Will Comply
A.4. Admission/Reception Area, which can be used in conjunction with the
pre-op area. Will Comply
A.5 Pre-op area, which can be used in conjunction with the
Adrnission/'reception area. Will Comply
A.6 Staff dressing and lounge-Operating room staff provided by the vendor
as well as Central. Prison Operating Room staff will change clothes in
the Central Prison O R dressing room. They will then dress in an
oversuit (bunny suit) and proceed to the Mobile 0 R to scrub and Don
gowns and gloves. Will Comply
A.7 Unisex restroom facility. Will Comply
A.8 Vendor must provide on-board portable x-ray equipment. Will Comply
A.13 Two dash autoclaves WILL COMPLY
A.16 Anesthesia equipment to include:
1. 0ne anesthesia machine WILL COMPLY
2. Rebreathing circuits Will Comply
A.18 Cardiac monitors for the operating room and the recovery area
Will Comply
A.20 Arterial pump when protocol requires Will Comply
A.21 IV pump must b e provided Will Comply
<PAGE>
A.24 Surgical Equipment, instruments, supplies, including specialty
equipment and supplies and instrumentation as follows:
a. General major & minor surgical instrument & linen packs setups
WILL COMPLY
b. Major & minor plastic surgery instrument & linen pack setups
WILL COMPLY
c. Major & Minor orthopedic surgery instrument & linen pack setups
Will Comply
d. Major & Minor ENT surgery instrument & linen pack setup
WILL COMPLY
e. Major dental surgery instrument & linen pack Will Comply
f. Minor prosthetics setup (will discuss further upon award)
Will Comply
A.25 Dictate Q equip meet must b e compatible with CP H's transcription
service Will Comply
A.26 Copies of Policies and Procedures must be provided upon receipt of
award notification or the following areas:
1. Risk Management Will Comply
2. Quality Management Will Comply
3. Infection Control Will Comply
4. Safety Will Comply
5. Sterilization Will Comply
6. Quality control testing logs Will Comply
7. Material Safety Data Sheets Will Comply
8. Disaster procedures Will Comply
A.27 Laboratory facilities for on-site CB C's and UA cultures utilizing
dipstick, technology and blood storage facilities. According to the
list of CLL4 waived lab tests, urine cultures and CB Cs are not listed
for on-site testing. Hemoglobin and Hematocrit can be done under the
CLIA License. We will comply with any test that is approved by the CLIA
waiver. The laboratory must meet the guidelines as specified by CLIA
act of 1967 and Amendments of 1988. Will Comply
B. The Vendor will provide a trailer with a space requirement not greater
than 53 feet long and 30 feet wide. Vendor must work with the North
Carolina Department of Health and Human Services; Division of Facility
services agency to ensure appropriate licensure and certification is
obtained by the Vendor to establish services in North Carolina.
Documentation must be received b y HS S 3 0 days prior to the star
date. Will Comply
C. Vendor must supply a backup generator in cases of power outages, power
surges, severe weather, etc. Backup generator will serve as lighting
and equipment needed in the operating room, recovery area and
bloodstorage area. DOC will supply the
<PAGE>
grounding padding and outlet socket needed to provide electricity to
the mobile unit. WILL COMPLY
D. Remains unchanged. WILL COMPLY
E. Remains unchanged. Will Comply
F. Remains unchanged. Will Comply
G. Remains unchanged. Will Comply
H. Vendor will provide the following personnel licensed and/or certified
to practice in the State of North Carolina.
1. Minimum o f two Registered Nurses (minimum two years experience)
to serve as recovery room and OR circulators Will Comply
2. Certified Nursing Assistant Will Comply
3. One Certified Operating Room Technician (C ORT) Will Comply
Please note: Vendor will be held responsible and liable for these
employees. Will Comply
L Remains unchanged Will Comply
J. Remains unchanged Will Comply
K. Upon award of this contract, the vendor shall provide, within 30 days
of award, proof of licensure, certification and experience of all
personnel (including driver) and must maintain licensure expiration
files. Failure to comply with this component will be cause for contract
termination for cause. Will Comply
L. Remains unchanged. Will Comply
M. The vendor must provide the following information for all employees
working under this contract, upon award of contract. This information
will allow DOC to conduct criminal background checks on all employees
working under this contract.
1. First, Middle and Last Name Will Comply
2. Date of Birth Will Comply
3. Social Security Number Will Comply
4. Drivers License Number and State of Issuance Will Comply
5. Race WILL COMPLY
6. Sex Will Comply
N. Remains unchanged. Will Comply
<PAGE>
O. The vendor will adhere to all rules, regulations and requests of DOC
custody and medical service personnel. Central Prison Hospital will
make available a copy of its policy and procedures to the awarded
contractor. WILL COMPLY
P. The vendor must include copies of their current Quality Assurance (QA)
Plan and the plan to interface with the Health Services Section's QA
activities. The awarded vendor will be required to attend quarterly QA
meetings with members of the Health Services QA Committee. The vendor
will also be requested to attend quarterly Partnership meetings to
discuss clinical and operational issues. Will Comply
Q. Upon award, the vendor must submit a written plan for interfacing with
Central Prison Hospital Healthcare Administrators, within 3 0 days of
award, with the current radiology, imaging, laboratory, infusion
therapy and pharmacy services. DOC reserves the right to approve or
reject the interfacing ability written plan. Will Comply
R. The vendor must provide monthly reports of total volume facility
utilization by CPT Code ICD-9-CM as well as by ICD-9-Cm code. The
vendor must provide a monthly report of charges to DOC for services.
All reports are due on the 15th of the month for the following month
being reported. These reports will be forwarded to DOC's Asst. Director
of Health Services, located at P.O. Box 29540, Raleigh, NC 27626-0540
Will Comply
S. Remains unchanged. Will Comply
T. The vendor may not experience more than two consecutive days and/or
three non consecutive days of down time (this includes, equipment,
supplies, etc., and personnel), in a thirty day period of scheduled
operating days. Should downtime exceed the time stipulated herein, the
vendor must reimburse DOC for any services provided at an off site
surgical facility, including custody and travel costs. At the option of
the vendor, a second trailer of the same caliber as the regularly
scheduled trailer, along with personnel, may be provided to DOC during
down time, at no additional cost. Whenever feasible, DOC will make best
effort to re-schedule surgeries from a downtime day. WILL COMPLY
U. Remains unchanged. Will Comply
V. The following is the schedule for utilization of the operating room
truck: Central Prison, Monday through Wednesday, 30 hours per week, on
a mutually agreed upon schedule between Central Prison's Healthcare
administrator or his designee and the vendor. DOC reserves the right to
modify the schedule to fit the needs of the prison facility with the
mutual consent of the vendor. Will Comply
<PAGE>
W. DOC will not schedule surgery on a State of North Carolina holiday
(Attachment 92), however; the vendor will add an additional workday
during the week of the holiday, if volume necessitates such scheduling.
WILL COMPLY
X. Remains unchanged. WILL COMPLY
Y. The vendor is required to carry; worker's compensation, medical
malpractice insurance, general liability insurance, property damage
insurance and automobile insurance for its employees, as stipulated on
page 15. Will Comply
Z. The level of surgery be performed on the vendor's truck is a follows:
1. Orthopedic, General surgery including Minor Vascular procedures
and Liver Biopsies. Transplants, Major Thoracic or Vascular
procedures, bypasses, etc. will not be performed under any
circumstances. Will Comply
1. AA. Remains Unchanged Will Comply
BB. Remains unchanged. Will Comply
CC. The vendor will not hire or recruit full time, DOC employees to provide
services, under this contract. The vendor must include the names and
agencies of any personnel currently employed with their organization
who are current or reared employees of the State of North Carolina.
Will Comply
DD. Remains unchanged. Will Comply
EE. Remains unchanged. Will Comply
FF. Remains unchanged Will Comply
RESPONSIBILITIES OF THE NORTH CAROLINA DEPARTMENT OF
CORRECTION:
J. DOC will furnish the awarded vendor a copy of the incident report and
policy and procedure manual.
K. DOC will furnish all electricity needed to operate truck. WILL the DOC
FURNISH WATER AND SEWER hook ups to operate the truck?
<PAGE>
P.O.Box 560699 - Orlando, FL 32856-0699 - OffiCe
407-849-2288 - 800-520-4225 - Fax 407-849-6412
SCOPE OF SERVICES
A. The vendor will provide a "State of the Art", fully mobile, operating
room truck with the following specifications:
1. Two completely equipped operating rooms
AMERICAN MOBILE SURGICAL SERVICES, INC. (AMSSI) COULD PROVIDE ONE
COMPLETELY EQUIPPED OPERATING ROOM, WHICH IS ALL THAT IS AVAILABLE
ON ONE OPERATING ROOM TRUCK. A SECOND OPERATING ROOM TRUCK COULD
BE PROVIDED WHEN THE CASE LOAD WARRANTS. AMSSI WOULD PROVIDE A
FAST TURNOVER TIME SO THAT THE SURGEONS DO NOT HAVE TO WAIT TO
START THEIR NEXT CASE. IN YOUR BACKGROUND STATEMENTS, 640 CASES
PER YEAR IS YOUR CASELOAD. THAT EQUATES TO 12.3 CASES PER WEEK OR
2.5 CASES PER DAY. ONE OPERATING ROOM COULD MORE THAN HANDLE THAT
CASE LOAD.
2. Completely equipped recovery room space to recover up to five
patients at any given time
AN OPERATING ROOM TRUCK CAN PROVIDE SPACE FOR TWO RECOVERY ROOM
PATIENT STRETCHERS. A WHEELCHAIR CAN SUFFICE AS AN AMBULATORY SEAT
FOR A THIRD PATIENT READY FOR DISCHARGE.
3. Two ambulatory surgical stations (recliners and/ or GURNEYS)
AN OPERATING ROOM TRUCK HAS A TOTAL OF THREE STRETCHERS.
4. Admission/reception area
THE PRE-OP AREA CAN SUFFICE AS THE ADMISSION/RECEPTION AREA
5. Pre-op area
THERE IS ONE FULLY EQUIPPED PRE-OP AREA
6. Staff dressing and lounge
THE STAFF WOULD DRESS IN THE BATHROOM AND THE ENTRY WAY WOULD BE
UTILIZED ALSO AS A LOUNGE.
7. Restrooms
THERE IS ONE RESTROOM ON THE MOBILE OPERATING ROOM TRUCK.
Visit us at Our Web Site: www.amssi.com
<PAGE>
8. Work Room/utility room (clean and dirty)
THERE IS A DIRTY UTILITY AND A CLEAN WORK ROOM
9. Portable X-ray equipment
AMSSI WOULD CONTRACT WITH A RADIOLOGY COMPANY FOR THESE SERVICES
OR WITH CPH.
10. C-Arm capability
AGAIN THE C-ARM WOULD BE A STANDARD PIECE OF EQUIPMENT.
11. Anesthesia work area
AN ANESTHESIA WORK AREA IS LOCATED IN THE OPERATING ROOM.
12. Storage for equipment
ALL EQUIPMENT CAN BE STORED IN THE OPERATING ROOM TRUCK OR ON A
STORAGE TRAILER THAT WE WOULD PROVIDE. THE STORAGE TRAILER WOULD B
E APPROXIMATELY 8 FT. x 30 ft. AND SIT NEXT TO THE MSU FOR EASY
ACCESS OF SUPPLIES.
13. Two flash autoclaves
TWO AUTOCLAVES, BOTH STEAM STERILIZERS, ARE STANDARD EQUIPMENT ON
THE MOBILE OPERATING ROOM TRUCK
14. One steam sterilizer
TWO STEAM STERILIZERS (AUTOCLAVES) WOULD BE LOCATED IN THE CLEAN
UTILITY ROOM.
15. One gas sterilizer or equivalent
A STERIS GAS STERILIZER OR A HIGH LEVEL GLUTERALDAHYDE
DISINFECTANT WOULD BE USED FOR DISINFECTING OF ENDOSCOPES.
16. Anesthesia equipment including but not limited to a. two
anesthesia machines
b. rebreathing circuits
ONE ANESTHESIA MACHINE IS ALL THERE IS ROOM FOR IN THE
OPERATING ROOM TRUCK.
ANESTHESIA CIRCUITS WOULD B E PROVIDED.
17. Dynamap BP machine
FIVE DYNAMAP BP MACHINES WOULD BE PROVIDED. ONE IN THE OPERATING
ROOM, TWO IN THE RECOVERY ROOM AND ONE IN THE PRE-OP AREA. A SPARE
BP MACHINE WOULD BE AVAILABLE IN CASE ONE MALFUNCTIONED.
18. Cardiac monitor for each operating room and for each recovery AREA
CARDIAC MONITORS WOULD BE PROVIDED FOR THE OPERATING ROOM, TWO FOR
THE RECOVERY ROOM AND ONE FOR THE PRE-OP AREA.
2
<PAGE>
19. Minimum of five (5) IV stands or tracks
FIVE IV STANDS WOULD BE PROVIDED.
20. Arterial pump (s)
AN ARTERIAL PUMP COULD BE PROVIDED.
21. IV pumps)
AN IV PUMP COULD BE PROVIDED.
22. Stairs on both sides of the trailer
STAIRS ON BOTH SIDES OF THE TRAILER WOULD BE PROVIDED.
23. Wheel chair lift
A WHEEL CHAIR LIFT WILL BE PROVIDED.
24. Surgical Equipment, instruments, supplies, including specialty
equipment and supplies and instrumentation as follows:
a. General major & minor surgical instrument & linen pack setups
(both rooms)
b. Major & minor plastic surgery instrument & linen pack setups
(both rooms)
c. Major & minor orthopedic surgery instrument & linen pack
setup (one room)
d. Major GYN surgery instrument & linen pack setup (one room)
e. Major ENT surgery instrument & linen pack setups (both rooms)
f. Major ENT surgery instrument & linen setup (one room)
g. Major dental surgery instrument & linen pack setup (one room)
h. Minor prosthetics setup (will discuss further upon award)
AMSSI WOULD PROVIDE THE FOLLOWING:
a. ONE GENERAL MAJOR SURGICAL INSTRUMENT TRAY
b. TWO MINOR SURGICAL INSTRUMENT TRAYS
c. ONE MAJOR AND TWO MINOR PLASTIC INSTRUMENT TRAYS
d. ONE MAJOR GYN INSTRUMENT TRAY
e. ONE MINOR ENT INSTRUMENT TRAY
f. ONE MAJOR INSTRUMENT TRAY
g. ONE MAJOR DENTAL INSTRUMENT TRAY
h. WILL ADD MINOR PROSTHETICS SETUP WHEN NEEDED
AMSSI WOULD PROVIDE ALL SETUP PACKS INCLUDING DISPOSABLE
LINEN FOR STERILE PROCEDURES.
25. Dictating equipment
DICTATING EQUIPMENT WOULD BE PROVIDED.
3
<PAGE>
26. Policies and procedures including:
a. Risk Management
b. Quality management
c. Infection control
d. Safety
e. Sterilization
f. Quality control testing logs
g. Material Safety Data Sheets
h. Emergency Care
i. Disaster procedures
AMSSI has included, with this proposal, a copy of the
requested policies and procedures.
27. Laboratory facilities for on-site CBC's, cross matching, UA
cultures, utilizing dipstick technology, and blood storage
facilities. The laboratory and it's personnel shall follow and
adhere to guidelines as specified by CLIA act of 1967 and
Amendments of 1988. Laboratory personnel shall be provided by the
vendor.
AMSSI has a CLIA License which enables us to perform those tests
specified by the license. AMSSI would contract with the DOC
laboratory or an outside laboratory to provide needed laboratory
services not covered under the CLIA License.
28. Emergency Equipment and drugs for the following (Please note
medications will be provided through the Department's Central
Pharmacy). DOC Drug Formulary will be available upon award:
a. Cardiac arrest
b. Respiratory Arrest
c. Seizures
d. Malignant hypothermia
AMSSI will provide a code cart with all life saving emergency
equipment and drugs. The Registered Nurses would be required to be
ACLS certified and yearly Malignant Hypothermia in-services would
be mandatory.
B. The Vendor will provide a trailer with a space requirement not greater
than 53 feet long and 30 feet wide. The Vendor shall provide
documentation of licensure and certification that trailer(s) provided
are authorized to conduct surgery.
AMSSI will provide said requirements.
C. The vendor will provide 208 three phase 200 amp service along with a
five in one connector at the trailer end. The trailer must be grounded
by a 5/8 inch grounding rod and cable. Grounding padding for trailer
and any other grounding material outlined shall be provided by the
vendor. A back up generator must be provided by the vendor in cases of
power outages, power surges, severe weather, etc. The back up generator
4
<PAGE>
will service lighting and equipment needed in the Operating rooms,
recovery area and blood storage area.
1. AMSSI will provide 208 three phase 200 amp service along with a
five in one connector at the trailer end. The trailer will be
grounded by a 5/8 inch grounding rod and cable.
2. The Grounding pad for the trailer and other grounding material
will be provided by AMSSI.
3. A BACK UP GENERATOR COULD BE PROVIDED BY AMSSI TO SERVICE THE
WHOLE MOBILE OPERATING ROOM TRUCK. IT IS MY UNDERSTANDING THE CPH
FACILITY'S GENERATOR WILL SUPPLY THE MSU. THE MSU WOULD HAVE AN
UPS (UNINTERRUPTED POWER SOURCE) SYSTEM ON BOARD TO KEEP LIFE
SAVING EQUIPMENT FUNCTIONING IN CASE OF A POWER FAILURE.
Attached is a site plan.
D. The vendor will furnish a standard water hose connection for water
supply with an adequate filtering and/or purification system.
AMSSI will provide a water hose and a water softener for the mobile
operating room truck.
E. The trailer must be equipped with a minimum of a 100 gallon gray water
tank and a 100 gallon black water tank and a standard three inch hose
connection for drainage.
AMSSI would supply these requirements.
F. Repairs, resulting from damage or injury to the tractor and trailer or
its contents, are the responsibility of the vendor. The vendor must
maintain preventive maintenance logs. DOC reserves the right to review
said logs as deemed necessary.
AMSSI would comply to said requirements.
G. The vendor's trailer must be wired to accommodate a telephone system.
AMSSI will provide a telephone system.
H. The vendor will provide, at all visits 7 a.m. to 5 p.m. to DOC prison
facilities, the following personnel licensed and/or certified to
practice in the State of North Carolina:
1. Minimum of two nurses to serve as recovery room and OR circulators
2. One medical clerk
3. One orderly
4. One Certified Operating Room Technician (CORT)
5. One anesthesiologist and/or nurse anesthesiologist with
supervision of an anesthesiologist.
6. One Laboratory technician
1. AMSSI will provide service to DOC prison facilities from 7
a.m. to 5 p.m.
2. AMSSI would provide three nurses to serve as PRE-OP NURSE, OR
circulator, and recovery room nurse
5
<PAGE>
3. A third nurse would be more versatile than a medical clerk,
she/he would assume the duties of a medical clerk
4. One orderly would be provided
5. One anesthesiologist and/or a nurse anesthetist would be
provided.
6. By utilizing the CLIA Waiver, the nurses on the mobile
operating room truck can draw blood for specific tests as
listed in section A. # 27. Contracts could be obtained from
full service laboratories to accommodate all other tests that
would be ordered.
I. The vendor will provide a Class A-CDL driver to move the operating room
truck from location to location. The vendor's driver must adhere to all
Federal and State DOT regulations regarding drug testing and license
renewal. The vendor will be held responsible for any fines and/or fees
incurred by it's driver for failure to adhere to these guidelines.
AMSSI will adhere to these guidelines.
J. The vendor shall provide staff to fasten sections of trailer together.
Assembly shall be completed within four (4) hours to make truck
operational at designated DOC location at no additional cost to the
Department.
AMSSI will adhere to these requests.
K. Upon award of this contract, the vendor shall provide to the
Department, within 15 days of beginning services, proof of licensure,
certification and experience of all personnel (including driver) and
must maintain licensure expiration files. Failure to comply with this
component will be cause for contract termination for cause.
AMSSI will adhere to these requests.
L. Vendor shall not employ persons with a history of criminal convictions
of felonies, to work under this contract, without receiving written
approval from the Department, stating its approval to said persons.
AMSSI will adhere to these requests.
M. The vendor must conduct criminal background checks on all employees
working under this contract and submit evidence to the Department with
10 days of commencing services, upon award of this contract.
AMSSI will comply with these requests.
N. The vendor will immediately remove any employee who is deemed by the
Department behaving in a manner that is either detrimental to the
patient or to the Staff. This will include but not be limited to;
offensive language, harassment, threats, use of drugs or alcohol.
AMSSI will comply with these requests.
6
<PAGE>
O. The vendor will adhere to all rules, regulations and requests of DOC
custody and medical services personnel The Department will provide a
copy of its policy and procedures to the awarded contractor.
AMSSI will adhere to all rules, regulations and requests of DOC
custody and medical services personnel. The staff will be
in-serviced on the DOC's policiesand procedures
P. The vendor shall include as part of their proposal, their current TQM
activities and how these activities will interface with the DOC"s.
AMSSI's TQM activities are as follows:
A quality indicator form is placed in every patient chart.
The nurses, technicians, and orderlies are responsible for
reporting anything out of the normal.
If an incident involves a patient, patient's lab or x-rays, a
Department of Corrections QA/QI form or Incident Report is filled
out and given to the Department of Correction's Risk Manager.
These forms are reviewed at the end of every working day.
If there is a serious issue, it is investigated that day and a
resolution to the problem would be put into action.
If the issue is something to be monitored, it is reported in the
monthly QA report.
Quarterly the reports are reviewed for trends.
This information is reviewed at the Quarterly QA/QI Committee
Meeting
The QA/QI report is reviewed at the Medical Advisory
Committee Meeting.
Our MAC meetings consists of surgeons, medical director, surgical
coordinator and representatives from the correctional facility.
The report generated from the MAC meeting is presented to the
Board of Directors by the President of Operations/Administrator.
Q. Upon award, the vendor shall contact the Department's current providers
of the following services and submit a written plan for interfacing
with these providers, to DOC, within 10 days of commencing work:
radiology, imaging, laboratory, infusion therapy and pharmacy services.
DOC reserves the right to approve or reject the interfacing ability
written plan.
AMSSI wants to work with the North Carolina Department of
Corrections in every way possible. We have worked with the Florida
Department of Corrections closely to create a very professional
collaboration.
R. The vendor shall provide monthly reports of total volume facility
utilization by ICD9-CM as well as CPT code. The vendor shall also
provide monthly reports of anesthesia and a monthly report of charges
to DOC for services. All reports are due on the 15' of the month
following the month being reposed. These reports will be
7
<PAGE>
forwarded to DOC's Assistant0 Director of Health Services or his
designee, located at 831 W. Morgan Street, Raleigh, NC 27603.
AMSSI WILL PROVIDE ALL OF THE REQUESTED REPORTS. ALSO, AMSSI CAN
PROVIDE A MONTHLY RECOVERY ROOM LOG.
S. In cases where an incident, involving DOC inmate and/or staff member,
has occurred, DOC incident reports must be completed by the vendor's
personnel, prior to the vendor's staff leaving, at the close of the
shift on which the incident occurred.
AMSSI WILL COMPLY WITH REQUESTED INCIDENT REPORTING.
T. The vendor may not experience more than two consecutive days and/or
three or more non consecutive days down time [this includes equipment
(unless otherwise specified herein), supplies, etc. and/or personnel]
in a thirty day period of scheduled operating days. Should downtime
exceed the time stipulated herein, the vendor will forfeit payment for
said month for all services and reimburse DOC for any services provided
at an alternate location including custody and travel costs. At the
option of the vendor, a second trailer of the same caliber as the
regularly scheduled trailer, along with personnel, may be provided to
DOC during this down time, at no additional cost to DOC.
AMSSIIS WILLING TO FORFEIT PAYMENT FOR THE DAYS THE MOBILE
OPERATING ROOM TRUCK CAN NOT PROVIDE SERVICE AFTER DOWNTIME OF TWO
CONSECUTIVE DAYS, AND REIMBURSE DOC FOR ANY SERVICES PROVIDED AT
AN ALTERNATE LOCATION INCLUDING CUSTODY AND TRAVEL COSTS.
U. Down time for on-board laboratory equipment and portable x-ray
equipment must meet DOC standards for mobile x-ray and laboratory
services (see Attachment #3). Should down time exceed those standards,
the vendor will be held responsible for providing those services, at no
additional cost to DOC.
AMSSI WILL PROVIDE CONTRACTS NEEDED FOR SERVICES OTHER THAN WHAT
CAN BE PROVIDED UNDER THE CLIA WAIVER FOR LAB TESTS.
AMSSI WILL ALSO PROVIDE A C-ARM FOR X-RAYS NEEDED DURING SURGERY.
IF OTHER X-RAY SERVICES ARE NEEDED A CONTRACT WOULD BE PROVIDED
FOR THAT SERVICE.
V. The following is the schedule for utilization of the operating room
truck:
1. Central Prison, Monday through Wednesday, weekly, 7a.m.to Sp.m.
AMSSI CAN MEET THIS SCHEDULE. AMSSI WOULD PREFER TO WORK OUT A
SCHEDULE WITH THE NC DOC SO THAT THE DOC COULD UTILIZE THE SERVICE
PROVIDED BY AMSSI THREE WEEKS OUT OF THE MONTH, MON. THROUGH FRI.
AMSSI THEN COULD SERVICE SURROUNDING AREAS THE FOURTH WEEK OF THE
MONTH.
8
<PAGE>
W. The vendor may not schedule surgery on a DOC holiday (Attachment
#2),however, the vendor will add an additional work-day during the week
of the holiday if volume necessitates such scheduling.
AMSSI will adhere to the DOC's holiday schedule and adjust the
schedule if needed.
X. The vendor shall utilize DOC contracting facilities and transportation
contractors when emergencies necessitate moving a patient from the
Operating Room to an intensive care unit. Upon award of this contract,
the awarded vendor shall provide written agreement to use DOC
facilities and contractors.
AMS SI agrees to use the same DOC facilities and transportation
contractors when emergencies necessitate. AMSSI will provide
written agreements.
Y. The vendor is required to carry malpractice insurance, general
liability insurance, property damage insurance and automobile insurance
for its employees, as stipulated herein.
AMSSI agrees to meet all insurance requirements.
Z. The level of surgery to be performed on the vendor's truck is as
follows: General major surgery up to major vascular procedures.
Transplants, major thoracic procedures, bypasses etc., will not be
performed under any circumstances.
AMSSI has had a year and a half of experience performing surgical
procedures on a mobile operating room truck. Anesthesia guidelines
should have a large bearing on the type of surgery and type of
patient that should receive services on the mobile operating room
truck.
AA. The vendor's truck will be leased to DOC over a five year period of
time. One year with an option to renew an additional four years in one
year increments.
AMSSI understands lease.
BB. The attached Alcohol and Drug Free Workplace Policy must be reviewed
and the signature page must be returned with the Vendor's response to
this solicitation (see Attachment #1).
AMSSI will comply.
CC. Please check the appropriate boxes:
1. Are members of vendor's personnel retired State of North Carolina
employees?
Yes No X
---
2. Are members of the vendor's personnel currently full time State of
North Carolina employees?
Yes No X
---
9
<PAGE>
DD. Initial transport fees of the truck from vendor's location to DOC's
location and transport fees for removal of trailer at the end of
contract term will be the responsibility of the Vendor. These fees will
include but not limited to; Driver's salary, Interstate/intrastate
transportation fees, Weight fee/fines, permits, etc.
AMSSI will adhere to these stipulations.
EE. The vendor shall include in their proposal a preliminary plan for
transferring emergently ill patients to the local DOC identified
hospital.
AMSSI will obtain transfer agreements from the DOC identified
hospitals and a transfer agreement will be obtained with the DOC's
Ambulance Co. of choice.
FF. The vendor will not charge STAT fees for services provided on board the
Vendor's truck (i.e. laboratory services, x-ray services etc.).
AMSSI agrees not to charge the NC DOC STAT fees.
10
<PAGE>
[GRAPHIC OMITTED]
North Carolina Department of Correction
A. Division of Departmental Purchasing & Services
2020 Yonkers Road - 4227 MSC - Raleigh, NC 27699-4227
Phone: (919) 716-3250 0 Fax: (919) 716-3983 or 019) 716-3984
James B. Hunt Jr., Governor
Larry A. Rhodes, Director
Theodis Beck, Secretary
AUGUST 6,1999
Ms. Sandy Thompson
AMSSI
1405 South Orange Avenue
Orlando FL 32806
RE: OPERATIONAL START DATE
Dear Ms. Thompson:
The Department has awarded mobile operating room services your to organization.
The operational start date is tentatively scheduled to begin on or about October
15,1999. The purchase order has been issued for the base period October
15,1999throughJune 30,2000.
Various implementation meetings will occur during the months of August 1999
through October 1999. This is a new venture for the Department and we look
forward to working with your organization.
Thank you in advance for your implementation with the above referenced venture.
Should you require additional information, please feel free to contact me at
919-716-3273.
Sincerely,
/s/ Sidra Owens
- -----------------------------
Sidra Owens, Purchasing Agent
Departmental Purchasing & Services
An Equal Opportunity/Affirmative Action Employer
<PAGE>
AMERICAN MOBILE
SURGICAL SERVICES, INC.
1. COST PROPOSAL
For Mobile Operating Room
Truck
IFB # 42000283
<PAGE>
SECTION V. COST PROPOSAL:
THE RESPONDING VENDORS MUST INCLUDE PRICING FOR THE BELOW ITEMS. THE
PRICES SUBMITTED BELOW WILL BE ACCEPTED AS THE VENDOR'S BEST AND FINAL OFFER.
PRICING MUST BE IN A SEPARATE SEALED ENVELOPE.
A. Comprehensive Monthly Human Resources flat rate based on 3 0 hours per week
scheduled for the following personnel:
1. Two Registered Nurses (R.N.)60 hours = $2160.00
2. One Certified Nursing Assistant (C.N.A.)30 hours= $240.00
3. One Certified Operation Room Technician (CORT)30 hours = $420
B. Procedures priced on performance in the Mobile Operating Room at 235 % X'S
MEDICARE RATE. Included in the rate is total cost of mobilizing
de-mobilizing (once a week) and operation of Operating Room and equipment.
Submission of CPT Code, base estimates on (number) of surgical procedures
performed annually.
1) Up to 700 procedures per year 125 % X Medicare Rate.
2) 700 to 1000 procedures per year 110% X Medicare Rate.
3) Should the scheduling requirements change to not operate on
consecutive days, the vendors submits the following charges for
the mobilization and demobilization of the truck:
Setup and breakdown $400.00
Optional Pricing Components
<TABLE>
<S> <C>
1) Tele-medicine capabilities wired $1,500.00 per month
2) Tele-medicine capabilities $2,500.00 per month
GYN surgical setup and linens $3,500.00 per setup month
(based on 10 cases per month)
</TABLE>
LOW OFFER WILL BE DETERMINED AS FOLLOWS:
120 hours times item A + item B(1) +B(2) times 50,000.00 + 4 times
item C = Monthly Total
OUR BID 120 X $58.00 = $6,960.00 + 125% +110% X 50,000 = $117,500 + 4 X $400 =
$1,600 FOR A FINAL BID OF $126,060.00 PER MONTH
12 months times Monthly Total = Annual Estimated Total Expenditure
<PAGE>
12 x $126,060.00 = $1,512,720.00 PER YEAR
PLEASE NOTE: ON OR BEFORE THE END OF THE CONTRACT TERM, THE DEPARTMENT RESERVES
THE RIGHT TO BUY THE MOBILE OPERATING TRUCK.
TOTAL PRICE OF EQUIPPED MOBILE OR AT BEGINNING OF LEASE PERIOD = $2,000,000.00
<TABLE>
<S> <C>
BUYOUT YEAR ONE $1,600,000.00
BUYOUT YEAR TWO $1,340,000.00
BUYOUT YEAR THREE $1,100,000.00
BUYOUT YEAR FOUR $ 780,000.00
BUYOUT YEAR FIVE $ 500,000.00
</TABLE>
SECTION VIII: TERMS AND CONDITIONS:
N. Insurance Requirements: The Contractor shall, ants sole cost and
expense, procure and maintain in full force and effect during the
term of the contract the following:
1. Worker's Compensation Insurance covering all of the Contractor's
employees who are engaged in any work under the contract. The
coverage should be the statutory limits. WILL COMPLY
2. Public Liability in the amount of $5,000,000.00 and Property
Damage Insurance in the amount of $1,000,000.00 (construed as
including the Contractor's Protective Insurance) and shall protect
the Contractor and any Subcontractor performing work covered on
the contract for claim for property damage or bodily injury
including death, as well as from claims for personal damages,
which may arise from operations under the contract, whether such
operations be by the Contractor or any Subcontractor or by anyone
directly or indirectly employed by either of them. WILL COMPLY
3. Malpractice Insurance in the amount of $1,000,000.00 per incident
and $3,000,000.00 in aggregate and it shall protect the Contractor
and any Subcontractor for claims of personal damages performing
work cover on the contract, which may arise from operations under
the contract, whether such operations be by the Contractor or any
Subcontractor or by anyone directly or indirectly employed by
either of them. WILL COMPLY
4. Automobile bodily injury and motor vehicle liability when the
service to be performed requires the use of motor vehicles.
WILL COMPLY
<PAGE>
Contractor shall furnish to the Department of Correction
certificates and ACCORD pages evidencing this insurance coverage
prior to commencing work and the issuance of a Purchase Order. All
certificates of insurance shall provide that the insurance company
will give the Department of Correction thirty (3 0) days written
notice prior to cancellation or any change in the stated coverage
of any insurance. Will Comply
Vendor's insurance carrier shall provide the Department of
Correction with a waiver of subrogation for all policies.
Will Comply
<PAGE>
<TABLE>
<CAPTION>
CPT CODE PROCEDURE DESCRIPTION FAC.FEE
- -------- --------------------- -------
<S> <C> <C> <C>
10060 Incision & drainage - simple $1,500.00
10061 Incision & drainage - complicated or multiple $1,500.00
10080 I&D pilonoidal Simple $1,750.00
10081 I&D pilonoidal complicated $1,750.00
10120 Removal of foreign body - simple $1,500.00
10121 Removal of foreign body - complicated $1,750.00
10140 I & D of hematoma - simple $1,750.00
11040 Debridement - partial thickness $1,750.00
11041 Skin - full thickness $1,750.00
11042 Skin & subcutaneous tissue $1,750.00
11049 Skin & subcutaneous tissue & muscle $1,750.00
11044 Skin & subcutaneous tissue - muscle & bone $1,750.00
11100 Biopsy of skin - 1 lesion $1,620.00
11200 Excision - multiple skin tags - any area up to 15 lesions $1,500.00
11400 Excision benign lesions - tunk/arm/leg 0.5cm or less $1,620.00
11401 Excision benign lesions - tunk/arm/leg 0.6cm-1.0cm $1,620.00
11402 Excision benign lesions - tunk/arm/leg 1.1-2.0cm $1,620.00
11403 Excision benign lesions - tunk/arm/leg 2.1 - 3.0cm $1,620.00
11404 Excision benign lesions - tunk/arm/leg 3.1 - 4.0cm $1,620.00
11406 Excision benign lesions - tunk/arm/leg over 4.0cm $2,000.00
11420 Excision benign lesion - scalp/neck/h&/feet/genetilia 0.5cm or less $1,620.00
11421 Excision benign lesion - scalp/neck/h&/feet/genetilia 0.6 - 1.0cm $1,620.00
11422 Excision benign lesion - scalp/neck/h&/feet/genetilia 1.1 - 2.0cm $1,620.00
11423 Excision benigh lesion - scalp/neck/h&/feet/genetilia 2.1 - 3.0cm $1,620.00
11424 Excision benigh lesion - scalp/neck/h&/feet/genetilia 3.1 - 4.0cm $1,620.00
11426 Excision benigh lesion - scalp/neck/h&/feet/genetilia over 4.0cm $2,000.00
11440 Excision benign lesion - face/ears/lids/nose/lips 0.5cm or less $1,620.00
11441 Excision benign lesion - face/ears/lids/nose/lips 0.6 - 1.0cm $1,620.00
11442 Excision benign lesion - face/ears/lids/nose/lips/tongue 1.1 - 2.0cm $1,620.00
11443 Excision benign lesion - face/ears/lids/nose/lips 2.1 - 3.0cm $1,620.00
11444 Excision benign lesion - face/ears/lids/nose/lips 3.1 - 4.0cm $1,620.00
11445 Excision benign lesion - face/ears/lids/nose/lips over 4.0cm $2,000.00
11450 Excision skin & subcutaneous tissue for hidranitis, axillary, 1.0 suture $1,620.00
11451 Excision skin & subcutaneous tissue for hidranitis, axillary, other closure $1,620.00
11462 Excision skin & subcutaneous tissue for hidranitis inguinal 1.0 suture $1,620.00
11463 Excision skin & subcutaneous tissue for hidranitis inguinal, other closure $1,620.00
11470 Excision skin & subcutaneous tissue for hidranitis perianal, perineal,
or umbilical, 1.0 suture $1,620.00
11471 Excision skin & subcutaneous tissue for hidranitis perianal, perineal,
or umbilical, other closure $1,620.00
11600 Excision malignant lesion, trunk/arm/leg 0.5cm or less $1,620.00
11601 Excision malignant lesion, trunk/arm/leg 0.6 - 1.0cm $1,620.00
11602 Excision malignant lesion, trunk/arm/leg 1.1 - 2.0cm $1,620.00
11603 Excision malignant lesion, trunk/arm/leg 2.1 - 3.0cm $1,620.00
11064 Excision malignant lesion, trunk/arm/leg 3.1 - 4.0cm $1,620.00
11606 Excision malignant lesion, trunk/arm/leg over 4.0cm $2,000.00
11620 Excision malignant lesion, scalp/neck/hand/feet/genitalia 0.5cm or less $1,620.00
11621 Excision malignant lesion, scalp/neck/hand/feet/genitalia 0.6 - 1.0cm $1,620.00
11622 Excision malignant lesion, scalp/neck/hand/feet/genitalia 1.1 - 2.0cm $1,620.00
11623 Excision malignant lesion, scalp/neck/hand/feet/genitalia 2.1 - 3.0cm $1,620.00
11624 Excision malignant lesion, scalp/neck/hand/feet/genitalia 3.1 - 4.0cm $1,620.00
11626 Excision malignant lesion, scalp/neck/hand/feet/genitalia over 4.0cm $2,000.00
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
CPT CODE PROCEDURE DESCRIPTION FAC.FEE
- -------- --------------------- -------
<S> <C> <C> <C>
11640 Excision malignant lesion, face/ears/lids/nose/lips 0.5cm or less $1,620.00
11641 Excision malignant lesion, face/ears/lids/nose/lips 0.6 - 1.0cm $1,620.00
11642 Excision malignant lesion, face/ears/lids/nose/lips 1.1 - 2.0cm $1,620.00
11643 Excision malignant lesion, face/ears/lids/nose/lips 2.1 - 3.0cm $1,620.00
11644 Excision malignant lesion, face/ears/lids/nose/lips 3.1 - 4.0cm $1,620.00
11646 Excision malignant lesion, face/ears/lids/nose/lips over 4.0cm $2,000.00
11730 Avulsion of nail plate, partial or complete, simple, single $1,500.00
11740 Evacuation of subungual hematoma $1,500.00
11750 Excision of nail and nail matrix $1,500.00
11770 Pilonoidal cyst excision - simple $1,750.00
11771 Pilonoidal cyst excision - extensive $1,750.00
11772 Pilonoidal cyst excision - complicated $1,750.00
11960 Insertion of tissue expanders $1,620.00
12001 Simple repair wound, scalp/neck/trunk/hand/feet 2.5cm or less $1,620.00
12002 Simple repair wound, scalp/neck/trunk/hand/feet 2.6 - 7.5cm $2,000.00
12004 Simple repair wound, scalp/neck/trunk/hand/feet 7.6 - 12.5cm $2,000.00
12005 Simple repair wound, scalp/neck/trunk/hand/feet 12.6 - 20.0cm $2,000.00
12006 Simple repair wound, scalp/neck/trunk/hand/feet 20.1 - 30.0cm $2,000.00
12007 Simple repair wound, scalp/neck/trunk/hand/feet over 30cm $2,000.00
12011 Simple repair wound, face/ears/lids/nose/lips 2.5cm or less $1,620.00
12013 Simple repair wound, face/ears/lids/nose/lips 2.6 - 5.0cm $1,620.00
12014 Simple repair wound, face/ears/lids/nose/lips 5.1 - 7.5cm $2,000.00
12015 Simple repair wound, face/ears/lids/nose/lips 7.6 - 12.5cm $2,000.00
12016 Simple repair wound, face/ears/lids/nose/lips 12.6 - 20.0cm $2,000.00
12017 Simple repair wound, face/ears/lids/nose/lips 20.1 - 30.0cm $2,000.00
12018 Simple repair wound, face/ears/lids/nose/lips over 30cm $2,000.00
12031 Layer closure wound, scalp/axillae/trunk 2.5cm or less $1,620.00
12032 Layer closure wound, scalp/axillae/trunk 2.6 - 7.5cm $1,620.00
12034 Layer closure wound, scalp/axillae/trunk 7.6 - 12.5cm $2,000.00
12035 Layer closure wound, scalp/axillae/trunk 12.6 - 20.0cm $2,000.00
12036 Layer closure wound, scalp/axillae/trunk 20.1 - 30.0cm $2,000.00
12037 Layer closure wound, scalp/axillae/trunk over 30cm $2,000.00
12041 Layer closure wound, neck/hand/feet/genetilia 2.5cm or less $1,620.00
12042 Layer closure wound, neck/hand/feet/genetilia 2.6 - 7.5cm $1,620.00
12044 Layer closure wound, neck/hand/feet/genetilia 7.6 - 12.5cm $2,000.00
12045 Layer closure wound, neck/hand/feet/genetilia 12.6 - 20.0cm $2,000.00
12046 Layer closure wound, neck/hand/feet/genetilia 20.1 - 30.0cm $2,000.00
12047 Layer closure wound, neck/hand/feet/genetilia over 30cm $2,000.00
12051 Layer closure wound, face/ears/lids/nose/lips 2.5cm or less $1,620.00
12052 Layer closure wound, face/ears/lids/nose/lips 2.6 - 5.0cm $1,620.00
12053 Layer closure wound, face/ears/lids/nose/lips 5.1 - 7.5cm $2,000.00
12054 Layer closure wound, face/ears/lids/nose/lips 7.6 - 12.5cm $2,000.00
12055 Layer closure wound, face/ears/lids/nose/lips 12.6 - 20.0cm $2,000.00
12056 Layer closure wound, face/ears/lids/nose/lips 20.1 - 30.0cm $2,000.00
12057 Layer closure wound, face/ears/lids/nose/lips over 30 $2,000.00
13100 Repair, complex trunk 1.1 - 2.5 cm $2,000.00
13101 Repair, complex trunk 2.6 - 7.5 cm $2,000.00
13120 Repair, complex sclap/arms/legs 1.1 - 2.5cm $2,000.00
13121 Repair, complex sclap/arms/legs 2.6 - 7.5cm $2,000.00
13131 Repair, complex face/genetelia/hands/feet 1.1 - 2.5cm $2,000.00
13132 Repair, complex face/genetelia/hands/feet 2.6 - 7.5cm $2,000.00
13150 Repair, complex lids/nose/ears/lips 1.0cm or less $2,000.00
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
CPT CODE PROCEDURE DESCRIPTION FAC.FEE
- -------- --------------------- -------
<S> <C> <C> <C>
13151 Repair, complex lids/nose/ears/lips 1.1 - 2.5cm $2,000.00
13152 Repair, complex lids/nose/ears/lips 2.6 - 7.5cm $2,000.00
13160 Secondary closure wound, extensive $2,000.00
13300 Reapir, unusual complicated over 7.5cm any area $2,000.00
14000 Adjacent tissue transfer trunk, defect 10sq cm or less $2,000.00
14001 Adjacent tissue transfer trunk, defect 10.1 - 30.0 sq cm $2,000.00
14020 Adjacent tissue transfer scalp/arms/legs 10sq cm or less $2,000.00
14021 Adjacent tissue transfer scalp/arms/legs 10.0 - 30.0 sq cm $2,000.00
14040 Adjacent tissue transfer, face/genetilia/hands/feet 10sq cm or less $2,000.00
14041 Adjacent tissue transfer, face/genetilia/hands/feet 10.1 - 30.0 sq cm $2,000.00
14060 Adjacent tissue transfer, lids/nose/ears/lips 10.0 sq cm or less $2,000.00
14061 Adjacent tissue transfer, lids/nose/ears/lips 10.1 - 30.0 sq cm $2,000.00
14300 Adjacent tissue transfer or rearrangement more than 30sq cm, unusual $2,000.00
15000 Excision preporation or creation of recipient site by excision $ 600.00
15100 Splint graft, trunk/scalp/arms 100sq cm or less $1,800.00
15200 Full thickness graft, trunk, 20 sq cm or less $1,620.00
15240 Full thick graft, forehead/cheeks/chin/mouth/neck/axille $1,620.00
15260 Full thick graft, nose/ears/eyelids and or lips $1,620.00
17110 Destruction by any method of flat warts up to 15 $1,800.00
19020 Mastotomy with drainage or exploration $1,620.00
20005 Incision of soft tissue abcess, deep $1,800.00
20200 Muscle biopsy superficial $1,750.00
20220 Biopsy bone tocar or needle $1,750.00
20240 Biopsy, excisional, superficial (Illium, sternum) $1,750.00
20525 Removal of foreign body in muscle - deep $1,750.00
20600 Arthrocentesis: small joint (fingers, toes) $1,000.00
20605 Arthrocentesis: intermediate joint (wrist,elbow or ankle) $1,000.00
20610 Arthrocentesis: major joint or burse (shoulder, hip, knee) $1,000.00
20670 Hardware removal $1,800.00
20680 Hardware removal - deep $1,800.00
20690 Application of a uniplane (pin or wire in one plane) unilateral $1,800.00
20692 Application of multi plane (pin or wire in more than 1 plane) $1,800.00
21010 Arthrotomy - temporomandibular joint $1,800.00
21040 Excision of benign mandible cyst/tumor $1,800.00
21044 Excision of malignant tumor of mandible $1,800.00
21110 Removal, arch bars $1,800.00
21235 Graft - ear cartilage to nose, ear $2,000.00
21310 Treatent - nasal fracture $2,000.00
21315 Manipulative treatment - nasal bone fracture wo stabalization $2,000.00
21320 Manipulative treatment nasal bone fracture $1,800.00
21325 Open treatment of nasal fracture - uncomplicated $2,000.00
21337 Treatment of closed nasal septal fracture $1,800.00
21366 Open treatment of open/closed or major area $2,000.00
21390 Open treatment of orbital floor, periorbital approach with implant $2,000.00
21395 Open treatment of orbital floor, periorbital approach with graft $2,000.00
21556 Excision tumor - deep subcutaneous $2,000.00
23101 Arthrotomy for biopsy or excision of torn cartilage $2,000.00
23120 Claviculectomy, partial (mumford procedure) with shoulder arthroscopy $2,700.00
23130 Acromioplasty, partial with shoulder arthroscopy $3,000.00
23140 Excsion of bone cyst or benign tumor of clavical or scapula $1,720.00
23350 Injection of shoulder arthrography $1,000.00
23415 Coracoacrominal ligament release with or without acromioplasty, rotator cuff $3,470.00
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
CPT CODE PROCEDURE DESCRIPTION FAC.FEE
- -------- --------------------- -------
<S> <C> <C> <C>
23455 Bankart type operation with or without stapling $3,470.00
23550 Open treatment of cromioclavicular dislocation $2,500.00
23700 Manipulation under anesthisia; shoulder $1,200.00
23740 Excsion prepattellar bursa $1,800.00
23745 Excsion baker cyst $1,800.00
24000 Arthrotomy - elbow with joint exploration $1,850.00
24106 Excision olecranon bursa $1,850.00
24130 Excision radial head $2,000.00
24350 Fasciotomy (epicondylitis) $2,000.00
24351 Fasciotomy (epicondylitis) with extensor origin detachment $2,000.00
24352 Fasciotomy with annular ligament resection $2,000.00
24536 Closed fracture with percutaneous skeletal fixator $2,200.00 +hardware
24585 Fasciotomy with osteotomy $1,800.00
24665 Open treatment radial head/neck fracture $2,100.00
25000 Release deQuervain's $2,000.00
25075 Excision tumor forearm and or wrist $1,620.00
25101 Arthrotomy wrist joint with or without biopsy $1,800.00
25111 Excision ganglion cyst $1,620.00
25112 Excision ganglion cyst recurrent $1,620.00
25130 Excisionor curettage of bone cyst or carpal bones $1,620.00
25150 Partial excision of bone ulna $1,750.00
25210 Carpectomy; one bone $1,750.00
25240 Excision distal ulna $1,800.00
25270 Arthrotomy with joint exploration $2,000.00
25400 Repair of malunion or nnunion radius or ulna $2,000.00
25444 Arthroplasty with prosthesis - lunate $2,000.00
25447 Interposition arthrosplasty $2,000.00
25560 Closed treatment radial/ulnar fracture without manipulation $1,500.00
25565 Closed treatment radial/ulnar fracture with manipulation $1,500.00
25600 Closed treatment distal radial fracture without manipulation $1,500.00
25605 Closed treatment distal radial fracture with manipulation $1,500.00
25610 Closed treatment complex distal radial fracture $1,500.00
25611 Closed treatment fracture; purcutaneous pinning or pins $1,620.00
25620 Open treatment of distal radial fracture $2,200.00
26040 Fasciotomy, palmar, dupuytrens contracture, closed $2,000.00
26045 Facciotomy, palmar for dupuytren's $1,800.00
26055 Trigger finger release $1,620.00
26070 Arthrotomy for injection $1,620.00
26115 Excision tumor hand or finger - subcutaneous $1,620.00
26116 Excision tumor hand or finger - deep $1,620.00
26121 Dupuytren's excision $2,000.00
26125 Fascitomy,partial, excision $1,800.00
26160 Excision of lesion of tendon sheath, capsule or ganglion $1,800.00
26210 Excision or curettage of bone cyst phalanx of finger $1,800.00
26230 Partial excision of bone metacarpal $1,800.00
26350 Flexor tendon or advancement without free graft $1,800.00
26356 Flexor tendon repair or advancement $1,800.00
26370 Profundus tendon repair or advancement - primary $1,800.00
26373 Profundus tendon repair, secondary without free graft $1,800.00
26392 Removal of tube and insertion tendon graft band $1,800.00
26418 Extensor tendon repair without free graft $1,800.00
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
CPT CODE PROCEDURE DESCRIPTION FAC.FEE
- -------- --------------------- -------
<S> <C> <C> <C>
26490 Opponeplasty; sublimis tendon transfer type $1,800.00
26502 Tendon pulley reconstruction with graft $1,800.00
26531 Arthroplasty prosthetic implant $1,800.00 +implant
26540 Repair collateral ligamnet, metacarpophalangeal joint $1,800.00
26541 Reconstruct collateral ligament $1,800.00
26545 Reconstruction collateral ligament including graft $1,800.00
26587 Reconstruction supernumerary digit, soft tissue and bone $1,800.00
26615 Open treatment of metacarpal fracture $2,000.00
26645 Closed treatment of carpometacarpal fracture with manipulation $1,500.00
26685 Open treatment CMC $2,100.00
26706 Treatment of metacarpophalangeal dislocation with percutaneous pinning $1,620.00
26715 Open treatment of metacarpophalangeal $2,100.00
26725 Treatment closed phalangeal shaft fracture with manipulation $1,500.00
26727 Treatment unstable fracture $2,100.00
26736 Open treatment of closed/open phalangeal fracture $2,100.00
26746 Open treatment open/closed articular fracture $2,100.00
26755 Open treatment distal phalangeal fracture $2,100.00
26776 Percutaneous fixation $1,620.00
26910 Amputation, metacarpal with finger or thumb - single $1,800.00
26951 Amputation finger or thumb, primary or secondary $1,800.00
26952 Amputation finger or thumb with local advancement flaps $1,800.00
26989 Unlisted procedure hands or fngers $1,800.00
27327 Excision tumor, thigh or knee area $2,000.00
27372 Removal of foreign body - thigh or knee area $2,100.00
27422 Reconstruction with extensor realignment $2,100.00
27424 Reconstruction with patellectomy $2,100.00
27425 Lateral retinacular release $2,100.00
27435 Capsulotomy, knee posterior capsular release $1,800.00
27570 Manipulation of joint $1,500.00
27630 Excision pf lesion of tendon sheath; leg and ankle $1,750.00
27650 Repair primary open or percutaneous ruptured achilles tendon $2,200.00
27691 Tendon transfer tibial $2,200.00
27695 Suture,primary $1,620.00
27720 Repair of nonunion or malunion tibia with out graft $2,100.00
27762 Treatment of closed distal tibia fracture with manipulation $1,500.00
27792 Open tratment of distal tibia fracture $2,200.00
27814 Open tratment of bimalleolar ankle fracture $2,200.00
28020 Arthrotomy with exploration $1,800.00
28024 Arthrotomy with exploration; interphalangeal joint $1,800.00
28043 Excision tumor; foot; subcutaneous $1,620.00
28060 Fasciotomy, excision of plantar fascia - partial $1,620.00
28080 Excision morton's neuroma $1,620.00
28090 Excision of lesion of tendon or capsule (cyst or ganglion) foot $1,620.00
28100 Excision or curettage bone cyst $1,620.00
28110 Osteotomy - partial excision $1,620.00
28111 Osteotomy, complete excision, first metatarsal head $1,750.00
28112 Other metatarsal head (2nd, 3rd or 4th) $1,750.00
28113 5th metatarsal head $1,750.00
28114 All metatarsal heads, with partial proximal phalangectomy $1,750.00
28118 Osteotomy, calcaneous $1,750.00
28119 Osteotomy, calcaneous for spur $1,750.00
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
CPT CODE PROCEDURE DESCRIPTION FAC.FEE
- -------- --------------------- -------
<S> <C> <C> <C>
28124 Partial excision of bone, phalanx of toe $1,750.00
28126 Condylectomy $1,750.00
28150 Phalangectomy of toe $1,750.00
28153 Resection head of phalanx, toe $1,750.00
28193 Complicated removal of foreign body $1,750.00
28200 Repair tendon, foot without free graft $1,750.00
28230 Tenotomy, open, flexor, foot - single $1,750.00
28234 Tenotomy, open, extensor, foot or toe $1,750.00
28240 Tenotomy, lengthening or release, abductor halucis muscle $1,620.00
28270 Capsulotomy for constracture, metatarsophalangeal joint $1,620.00
28272 Interphalangeal joint $1,620.00
28280 Webbing operation (create syndacylism of toes) for soft corn $1,620.00
28285 Hammertoe operation $1,800.00
28286 Hammertoe operation, 5th toe with skin closure $1,800.00
28288 Osteotomy,partial metatarsal head $1,750.00
28290 Bunionectomy $2,135.00
28292 Kellar, Mcbride, Mayo type procedure $2,135.00
28294 Resection of joint with tendon transplants (Joplin type procedure) $2,135.00
28296 Hallux Valgus correction with metatarsal osteotomy $2,135.00
28298 By phalan osteotomy $2,135.00
28299 By other methods (double osteotomy; fixation) $2,135.00
28300 Calcaneous osteotomy $1,750.00
28308 Osteotomy other than 1st metatarsal $1,750.00
28310 Osteotomy, phalanx 1st toe $1,750.00
28315 Sesamoidectomy 1st toe $1,750.00
28470 Treatment closed metatersal fracture $1,750.00
28725 Subtalar arthodesis $1,750.00
28760 Arthrodesis - great toe $1,750.00
29815 Arthroscopy, shoulder, diagnostic $2,700.00
29819 Arthroscopy, shoulder, removal foreign body $2,700.00
29820 Arthroscopy, shoulder, partial synovectomy $2,700.00
29821 Arthroscopy, shoulder, complete synovectomy $2,700.00
29822 Arthroscopy, shoulder, limited debridement $2,700.00
29823 Arthroscopy, shoulder, extensive debridement $2,700.00
29825 Arthroscopy shoulder, adhesiolysis $2,700.00
29826 Arthroscopy, shoulder, decompression, subacrominal space, acromioplasty $3,470.00
29830 Arthroscopy, elbow, diagnostic $2,700.00
29834 Arthroscopy, elbow, removal foreign body $2,700.00
29835 Arthroscopy, elbow, partial synovectomy $2,700.00
29836 Arthroscopy, elbow, complete synovectomy $2,700.00
29837 Arthroscopy, elbow, limited debridement $2,700.00
29838 Arthroscopy, elbow, extensive debridement $2,700.00
29840 Arthroscopy, wrist, diagnostic $2,700.00
29843 Arthroscopy, wrist, for infection, lavage, drainage $2,700.00
29844 Arthroscopy, wrist, partial synovectomy $2,700.00
29845 Arthroscopy, wrist, complete synovectomy $2,700.00
29847 Arthroscopy, wrist, internal fixation $2,200.00
29870 Arthroscopy - knee, diagnotic $2,170.00
29871 Arthroscopy - knee for injection, lavage drainage $2,170.00
29874 Arthroscopy - knee removal foreign body $2,170.00
29875 Arthroscopy - knee limited synovectomy $2,170.00
29876 Arthroscopy - knee major synovectomy $2,170.00
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
CPT CODE PROCEDURE DESCRIPTION FAC.FEE
- -------- --------------------- -------
<S> <C> <C> <C>
29877 Arthroscopy - knee debridement/shaving (chondroplasty) $2,170.00
29878 Arthroscopy - knee abrasion arthroplasty $2,170.00
29880 Arthroscopy - knee menisectomy (medial & lateral) $2,170.00
29881 Arthroscopy - knee menisectomy (medial or lateral) $2,170.00
29882 Arthroscopy - knee meniscus repair (medial or lateral) $2,170.00
29883 Arthroscopy - knee meniscus repair (medial & lateral) $2,170.00
29884 Arthroscopy - knee adhesiolysis $2,170.00
29885 Arthroscopy - knee grafting for osteochondritis dissecans with bone graft $2,500.00
29886 Arthroscopy - knee grafting for osteochondritis dissecans lesion $2,500.00
29887 Arthroscopy - knee grafting for osteochondritis dissecans lesion internal
fixation $2,500.00
29888 Anterior cruciate ligament repair $3,570.00
29889 Posterior cruciate ligament repair $3,000.00
59894 Arthroscopy - ankle removal of foreign body $2,170.00
29895 Arthroscopy - ankle partial synovectomy $2,170.00
29897 Arthroscopy - ankle limited debridement $2,170.00
29898 Arthroscopy - ankle extensive debridement $2,170.00
30110 Excision - nasal polyp - simple $1,950.00
30115 Excision - nasal polyp - extensive $1,950.00
30117 Excision or destruction, intranasal lesion, internal approach $1,950.00
30140 Submucous resection turbinate $2,100.00
30400 Rhinoplasty, nasal tip reconstruction $1,950.00
30410 Rhinoplasty, complete $1,950.00
30420 Rhinoplasty with septal repair $1,950.00
30450 Rhinoplasty major revision $1,950.00
30520 Septoplasty $2,100.00
30620 Reconstruction, functional internal nose $2,000.00
30630 Repair, nasal septal perforations $2,000.00
31020 Sinusotomy, maxillary (antrotomy) intranasal $2,100.00
31030 Sinusotomy, calwell-Luc $2,100.00
31032 Sinusotomy, calwell-LUC with removal of polyps $2,100.00
31200 Ethnoidectomy $2,000.00
31250 Nasal endoscopy, diagnostic with or without biopsy $2,100.00
31252 Nasal endoscopy, surgical with nasal polypectomy $2,100.00
31255 Nasal endoscopy with ethnoidectomy $2,100.00
31260 Maxillary sinus endoscopy, diagnostic with or without biopsy $2,100.00
31263 Maxillary sinus endoscopy, surgical with removal foreign body $2,100.00
31267 Maxillary sinus endoscopy with removal polyps $2,100.00
31275 Sphenoid endoscopy, surgical $1,500.00
34856 Suture major peripheral nerve inc. transposition $2,000.00
35206 Repair blood vessel, upper extremity $2,000.00
35207 Repair blood vessel, habd finger $1,800.00
36000 Introduction, intracatheter vein $1,750.00
36260 Infusion pump implant $1,750.00
36495 Insertion IV infusion pump or port $1,750.00
36497 Removal - implantable intravenous,infusion pump or port $1,750.00
36830 Non autogeneous graft $1,750.00
37720 Saphenous vein ligation $2,000.00
37760 Ligation of perforators, subfascial, radical $2,000.00
37785 Varicose vein ligation $2,000.00
38500 Biopsy or excision of lymp node $1,800.00
38505 Biopsy or excision of lymp node by needle $1,800.00
38510 Biopsy of deep cervical lymp node $1,800.00
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
CPT CODE PROCEDURE DESCRIPTION FAC.FEE
- -------- --------------------- -------
<S> <C> <C> <C>
38520 Excision of nodule with scalene fat pad $1,800.00
38525 Biopsy of deep axillary lymp node $1,800.00
38740 Axillary lymphadenectomy, superficial $1,800.00
38745 Axillary lymphadenectomy $1,800.00
69636 Tympanoplasty with antrotomy or mastoidectomy with ossicular chain
reconstruction $2,800.00
40500 Vermillionectomy $1,800.00
40530 Wedge lip resection $1,800.00
40819 Frenu;otomy $1,620.00
41899 Dental restoration $1,800.00
42408 excision sublingual salicary cyst $1,800.00
42831 Asnoidectomy, primary age 12 or over $1,800.00
43999 Unlisted procedure, stomach $1,750.00
45170 Excision of rectal tumor, transanal approach $1,750.00
45300 Proctosigmoidoscopy $1,500.00
45330 Sigmoidoscopy $1,500.00
45331 Sigmoidoscopy for biopsy $1,500.00
45333 Sigmoidoscopy for removal of polypoid lesions(s) $1,500.00
45378 Colonoscopy, fiber oprtic, diagnostic $1,600.00
45380 Colonoscopy for biopsy $1,600.00
45382 Colonoscopy for control of hemorrhage $1,750.00
45383 Colonoscopy for ablation of tumor $1,750.00
45885 Colonscopy for removalof polypoid lesion(s) $1,750.00
45905 Dilation of anal spinchter under anesthisia $1,750.00
46000 Fistulotomy subcutaneous $1,750.00
46045 I&D submucosal abscess under anesthisia $1,750.00
46060 I&D ischiorectal or intramural abscess with fistulotomy $1,750.00
46080 Sphinterotomy, anal $1,750.00
46200 Fissurectomy $1,750.00
46250 Hemorrhoidectomy, external complete $1,750.00
46255 Hemorrhoidectomy, simple $1,750.00
46257 Hemorrhoidectomy, with fissurectomy $1,900.00
46260 Hemorrhoidectomy, Complex $1,900.00
46262 Hemorrhoidectomy with fistulectomy with or without fissurectomy $1,900.00
46270 Fistulectomy, subcutaneous $1,750.00
46275 Fistulectomy $1,750.00
46280 Fistulectomy, complex or multiple $1,800.00
46600 Anoscopy, diagnostic $1,500.00
46610 Recatal polypectomy $1,800.00
46700 Adult anoplasty $1,800.00
46924 Destruction of lesion, anus (chondyloma) extensive (anal warts) $1,900.00
49310 Laparoscopic cholecystectomy $4,000.00
49311 Laparoscopic cholecystectomy without $4,000.00
49505 Inguinal hernia repair - age 5 and over $2,020.00
49515 Spermatocelectomy $1,900.00
49520 Inguinal hernia repair - recurrent $2,020.00
49530 Inguinal hernia repair - incarcerated $2,020.00
49560 Ventral hernia repair (incisional) $2,020.00
49570 Epigastric hernia repair $2,020.00
49581 Umbilical hernia repair age 5 and over $2,020.00
49570 Spigelian hernia repair $2,020.00
51555 Excision tumor, soft tissue of neck or thorax $1,620.00
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
CPT CODE PROCEDURE DESCRIPTION FAC.FEE
- -------- --------------------- -------
<S> <C> <C> <C>
52000 Cystourethroscopy $1,500.00
52005 Cystourethroscopy with ureteropyelography $1,500.00
52007 Cystourethroscopy with brush biopsy $1,500.00
52204 Cystourethroscopy with biopsy $1,500.00
52214 Cystourethroscopy with fulguration $1,500.00
52224 Cystourethroscopy with fulgure of minor (less than .5cm lesions) $1,800.00
52234 Cystourethroscopy with fulgure resect of small bladder tumor $1,900.00
52235 Cystourethroscopy with fulgure resect medium bladder tumor $1,900.00
52240 Cystourethroscopy with fulgure resect large bladder tumor $1,800.00
52260 Cystourethroscopy with dilation of bladder for interstital cysytitis $1,800.00
52275 Male Cystourethroscopy $1,500.00
52276 Cystourethroscopy with direct vision internal urethrotomy $1,995.00
52281 Cystourethroscopy with calibration and or dilation $1,620.00
52290 Cystourethroscopy, diagnosis with meatotomy $1,620.00
52310 Cystourethroscopy with removal foreign body - simple $1,620.00
52320 Cystourethroscopy with removal of calculus $1,995.00
52332 Cysto with insertion of indwelling ureteral stent $1,995.00
52335 Cystourethroscopy with utereoscopy and or pyeloscopy $1,995.00
52340 Cystourethroscopy diagnosis with TURBT $1,995.00
52601 Cystourethroscopy diagnosis with TURP $1,995.00
53020 Meatotomy, cutting of meatus, except infant $2,150.00
53235 Excision urethral diverticulum, male $1,620.00
54001 Dorsal slit $1,620.00
54161 Circumcision, adult $1,620.00
54300 Penile torsion (chordee) $1,750.00
54340 Hypospadias repair $1,800.00
54500 Biopsy of testis, needle $1,800.00
54505 Biopsy of testis, incisional $1,750.00
54520 Orchiectomy $1,750.00
54530 Orchiectomy, inguinal approach $1,850.00
54540 Orchiopexy with or without hernia repair $1,850.00
54840 Excision of spermatocele with or without epididymectomy $2,020.00
54861 Epididymectomy, bilateral $1,900.00
55040 Hydroelectomy $1,900.00
55041 Hydroelectomy bilateral $1,900.00
55110 Scrotal exploration $1,900.00
55250 Vasectomy $1,900.00
55400 Vasovasectomy $1,900.00
55530 Excision of spermatic vein cariocele $2,150.00
55700 Biopsy, prostrate, needle or punch, single or multiple $1,750.00
56000 Incision and drainage of perineal abcess $1,750.00
56200 Perinoplasty $1,750.00
56304 Laparoscopy with lysis adhesions $3,000.00
56305 Laparoscopy with biopsy $3,000.00
56306 Laparoscopy with aspiration fluid $3,000.00
62270 Spinal puncture, lumbar diagnostic $ 800.00
62273 Epidural blood patch $ 800.00
62275 Injection of anesthisia, lumbar/caudal epidural $ 800.00
62280 Injection of substance other than anesthisia, lumbar or caudal epidural $ 800.00
63001 Microsiacectomy $3,000.00
64402 Somatic nerve block; facial nerve $ 800.00
64405 Somatic nerve block; greater occipital area $ 800.00
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
CPT CODE PROCEDURE DESCRIPTION FAC.FEE
- -------- --------------------- -------
<S> <C> <C> <C>
64408 Somatic nerve block; vagus nerve $ 800.00
64410 Somatic nerve block; phrenic nerve $ 800.00
64412 Somatic nerve block; epinal accessory nerve $ 800.00
64413 Somatic nerve block; cervical plexus $ 800.00
64415 Somatic nerve block; brachial plexus $ 800.00
64417 Somatic nerve block; auxillary nerve $ 800.00
64418 Somatic nerve block; suprascapular nerve $ 800.00
64420 Somatic nerve block; intercostal nerve, single $ 800.00
64421 Somatic nerve block; intercostal nerve, multiple $ 800.00
64425 Somatic nerve block; ilioinguinal, iliohypogastric nerves $ 800.00
64430 Somatic nerve block; pudendal nerve $ 800.00
64435 Somatic nerve block; paracervical nerve $ 800.00
64440 Somatic nerve block; paravertebral nerve, single $ 800.00
64441 Somatic nerve block; paravertebral nerve, multiple $ 800.00
64442 Somatic nerve block; paravertebral facet joint nerve, lumbar, single level $ 800.00
64443 Somatic nerve block; paravertebral facet joint nerve, lumbar each additional
level $ 800.00
64445 Somatic nerve block; Sciatic nerve $ 800.00
64450 Somatic nerve block; other peripheral nerve or branch $ 800.00
64505 Somatic nerve block; sphenopalatine ganglion $ 800.00
64508 Somatic nerve block; carotid sinus $ 800.00
64510 Somatic nerve block; stellate ganglion $ 800.00
64520 Somatic nerve block; lumbar or thoracic $ 800.00
64713 Neuroplasty, brachial plexus $1,620.00
64718 Neuroplasty, ulnar nerve at elbow $1,620.00
53675 Insertion of supropubic catheter $1,000.00
64719 Neuroplasty, ulnar nerve at wrist $1,620.00
64721 Neuroplasty, median nerve at carpal tunnel $1,620.00
64722 Decompression, unspecified nerve $1,620.00
64774 Excision of neuroma; cutaneous nerve $1,620.00
64782 Excision of neuroma; hand or foot $1,620.00
64787 Implantation of nerve and into bone or muscle $2,500.00
64830 Microdissection and or micorepair of nerve $2,500.00
64831 Suture of digital nerve, hand or foot, one $1,800.00
64834 Suture of one nerve, hand or foot, common sensory nerve $1,800.00
69110 Excision of external ear $1,800.00
69140 Excision exostosis, external $1,800.00
69205 Removal foreign body - ear (Earicular) $1,620.00
69300 Otoplasty, unilateral $2,100.00
69399 Unlisted procedure - external ear $2,000.00
69420 Myringotomy with tubes $1,500.00
69421 Myringotomy with tubes, general anesthisia $1,500.00
69424 Removal of tubes $1,500.00
69433 Tympanostomy with tubes $1,500.00
69436 Tympanostomy with tubes, general anesthisia $1,500.00
69501 Mastoidectomy, simple $3,000.00
69620 Myringoplasty $2,000.00
69631 Tympanostomy without mastoidectomy $3,000.00
69632 Tympanostomy without mastoidectomy with ossicular chain reconstruction $3,000.00
69635 Tympanostomy w/ antrotomy or mastoidectomy without ossicular chain
reconstruction $3,000.00
69637 Tympanostomy w/ antrotomy or mastoidectomy with ossicular chain
reconstruction & prosthesis $3,000.00
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
CPT CODE PROCEDURE DESCRIPTION FAC.FEE
- -------- --------------------- -------
<S> <C> <C> <C>
69641 Tympanostomy w/ mastoidectomy without ossicular reconstruction $3,000.00
69642 Tympanostomy w/ mastoidectomy with ossicular reconstruction $3,000.00
69643 Tympanostomy w/ mastoidectomy; intact wall, without ossicular chain
reconstruction $3,000.00
69644 Tympanostomy w/ mastoidectomy; intact wall, with ossicular chain
reconstruction $3,000.00
69645 Tympanostomy w/ mastoidectomy; radical complete, without ossicular chain
reconstruction $3,000.00
69646 Tympanostomy w/ mastoidectomy; radical complete, with ossicular chain
reconstruction $3,000.00
69650 Stapes mobilization $3,000.00
69660 Stapedectomy or stapedotomy w/ reestablishment or ossicular continuity $3,000.00
69661 With footplate drill out $3,000.00
69662 Revision of stapedectomy or stapedotomy $2,000.00
</TABLE>
<PAGE>
<TABLE>
<S> <C>
- ---------------------------------------------------------------------------------------------
STATE OF NORTH CAROLINA INVITATION FOR BID:
Department of Correction --------------------------------------------------
Division of DEPARTMENTAL PURCHASING & Bids will be publicly opened: September10,1998
SERVICES --------------------------------------------------
Contract Type: Agency Specific
- ---------------------------------------------------------------------------------------------
REFER ALL INQUIRIES TO: Sidra Owens Description: Mobile Operating Room Truck
telephone No. (919)716-3273
- ---------------------------------------------------------------------------------------------
Email: [email protected] Using Agency Name: DOC-Division of Health Services
- ---------------------------------------------------------------------------------------------
(See page 2for mailing instructions.) Agency Reference No.0000001174
- ---------------------------------------------------------------------------------------------
</TABLE>
NOTICE TO BIDDERS
Sealed bids, subject to the conditions made a part hereof, will be received at
this office (Departmental Purchasing & Services) unti12:00 p.m. on the day of
opening and then opened, for furnishing and delivering the commodity as
described herein. Refer to page 2 for proper mailing instructions.
Bids submitted via facsimile (FAX) machine in response to this Request for
Proposal WILL NOT be acceptable. Bids are subject to rejection unless submitted
in accordance with requirements herein.
EXECUTION
In compliance with this Invitation For Bids, and subject to all the conditions
herein, the undersigned offers and agrees to furnish and/or deliver any or all
requested items upon which prices are bid, at the prices set within the proposal
for each item within the time specified herein. By executing this bid, I certify
that this bid is submitted competitively and without collusion (G.S.143-54).
Failure to execute/sign bid prior to submittal shall tender bid invalid. Late
bids are not acceptable.
- --------------------------------------------------------------------------------
BIDDER: FEDERALID OR SOCIAL SECURITY NO.
American Mobile Surgical Services, Inc. 59-341-9967
- --------------------------------------------------------------------------------
STREET ADDRESS: P.O. BOX: ZIP:
1405 South Orange Avenue 560699 32856
- --------------------------------------------------------------------------------
CITY & STATE & ZIP: TELEPHONE TOLL FREE TEL. NO
Orlando, NUMBER:
407-849-2288 100)520-4225
- --------------------------------------------------------------------------------
TYPE OR PRINT NAME & TITLE OF PERSON SIGNING: FAX NUMBER:
San 407-849-6412
- --------------------------------------------------------------------------------
AUTHORIZED SIGNATURE: DATE: E-MAIL:
www.amssi.com
- --------------------------------------------------------------------------------
Offer valid for 90 days from date of bid opening unless otherwise stated here:
days
MANDATORY PREPROPOSAL CONFERENCE/SITE VISIT:
Date: September 1, 1998
Time:10:00A.M.
Location: 2020 Yonkers Road, Raleigh, North Carolina 27604
QUESTIONS:
Questions concerning the specifications in the RFP will be received in writing
(fax # 919-716-3984,Intemet address listed above) until AUGUST28.1998 prim.
5:OOO.M. If a mandatory conference/site visit is held, a summary of all
questions and answers will be mailed to all firms receiving a copy of the RFP
and responding to mandated conferences/site visits. If no mandatory component,
the addendum will be posted on the same manner as document received.
<PAGE>
Page 2 BIDDER:
Bid No.
ACCEPTANCE OF BID:
If any or ail parts of this bid are accepted, an authorized representative of
Department of Correction may affix their .mature hereto and this document and
the provisions of the Request for Proposal, Terms and Conditions specific to
this request for Proposal, the Specifications/Scope of Work, and the North
Carolina General Contract Terms and Conditions shall then constitute the written
agreement between the parties. A copy of this acceptance may be forwarded to the
successful bidder(s). This submission shall serve as notification of award. Work
shall not begin until the issuance of a purchase order.
FOR DEPARTMENT OF CORRECTION USE ONLY
Offer accepted and contract awarded this day of ,19 ,as
indicated on attached certification or purchase order,
By (Authorized representative of the Department of Correction).
MAILING INSTRUCTIONS: Mail one original fully executed bid document and -
copies, unless otherwise instructed and include only one set per enclosure
(envelope). Address enclosure as listed below and insert bid number as shown
below: It is the responsibility of the bidder to have the bid in this office by
the specified time and date of opening.
- --------------------------------------------------------------------------------
DELIVERED BY US POSTAL SERVICE DELIVERED BY ANY OTHER MEANS
- --------------------------------------------------------------------------------
BID NO. Attn: IBID NO.0000001174 Attn: Sidra Owens
North Carolina Department of Correction North Carolina Department of
Departmental Purchasing & Services Correction Departmental Purchasing
P. O. Box 29540 & Services
Raleigh, N C 27626-0540 2020 Yonkers Road
Raleigh, N C 27604
- --------------------------------------------------------------------------------
TAB ULATIONS: Verbal tabulations of proposals may be obtained by calling
(919)716-3250. Tabulations will be available upon request no earlier than 2:00
p.m. on the first working day following the date of opening. Requests for
lengthy or written tabulations cannot be honored.
CONTRACT ADMINISTRATORS: (WHEN APPLICABLE)
The Contract Administrator for the parties shall be: For the Department of
Correction, Purchaser named above and for the Contractor, the individual signing
the proposal document or other individual so listed within the body of the
document.
ORDER OF PRECEDENCE:
In cases of conflict between specific provisions in this Request for Proposal,
the order of precedence shall be:
1. Special Terms and Conditions specific to this proposal
2. Speciflcations or Scope of Services specific to this proposal
3. North Carolina General Contract Terms and Conditions
4. Instructions to Offerors/Bidders
NOTICE TO OFFERORS:
The offeror is cautioned that the requirements of this RFP can be altered
only by written addendum and that verbal communication from whatever source are
of no effect.
Definition: The use of Request For Proposal and Invitation For Bid
constitute the same document and may be used interchangeably. The use of
Proposal and Bid are also interchangeable.
All proposals are subject to the provisions of the Request for Proposal,
Special Terms and Conditions, Specifications and General Instructions. The State
objects to and will not evaluate or consider any additional terms and conditions
submitted with an offeror's response. Do not attach any additional terms and
conditions. By execution and delivery of this document, the bidder agrees that
any additional terms and conditions, whether submitted purposely or
inadvertently, shall have no force or effect.
2
<PAGE>
Page 3 BIDDER:
Bid No.
I. INTRODUCTION:
The Department of Correction, Division of Prisons (DOC), Health
Services Section (HSS), provides health services to a population of
over 40,000 inmates annually; ( this includes both the standard average
annual population and the number of admissions). All inmate admissions
to DOC require a physical examination and appropriate follow-up for all
existing medical conditions, including surgical and diagnostic
services. DOC provides various levels of health services at each of the
ninety-three (93) plus prison facilities across the State and at a
number of inpatient facilities located within the prison system. There
are three (3) prison hospitals: Central Prison and North Carolina
Correctional Institution for Women both located in Raleigh, N C and
McCain Correctional Hospital, located in Hoke County. In the future,
DOC may be opening other prison facilities providing various levels of
medical and diagnostic care according to population increases and
decreases.
N.C. G.S. 148-19 mandates that the Department of Correction provides
health care services to inmates. Also the Constitution of the United
States, under the eighth amendment, requires adequate health services
to inmates which would include appropriate medical services ordered by
certified attending physicians.
Chapter 500, Senate Bill 43, Part XIV, Section 66 of the 1989 Session
Laws of North Carolina directs DOC to negotiate for rates comparative
to Medicaid rates for all medical services rendered to the Department
by providers who are not State of North Carolina employees.
II. BACKGROUND:
Central Prison Hospital (CP H) is the hub of medical activity for all
males inmates with at custody classification of medium, close and
maximum. CPH services the medical needs of approximately 10,000
inmates.
CPH has in-house physician coverage twenty-four (24) hours per day,
seven (7) days per week. Patients treated at CP H range from acute
in-patient domiciliary, skilled intermediate nursing and
ambulatory/out-patient.
CP H operates numerous specialty outpatient clinics, including
orthopedics, neurology, urology, general surgery, ENT and cardiology.
Other specialty services are available by transporting inmates to
medical providers in nearby towns. The outpatient clinics are extremely
active requiring frequent access to advanced diagnostics such as CT,
MRI and ultrasound.
The DOC seeks the services of a qualified provider to deliver mobile
surgical equipment and personnel for surgical services to be performed
on-site at CPH.
The annual volume of surgical services is estimated at 640 procedures.
This includes but not limited to; CHOLECYSTOSTOMY, ORTHOPEDIC O RIF,
VASCULAR ACCESS DIALYSIS, APPENDECTOMY, REPAIRS OF COMPLEX LACERATIONS,
BIOPSIES, ENDOSCOPIES AND BRONCHOSCOPY.
III. SCOPE OF SERVICES:
Vendors responding to this Invitation for Bids must meet the following
minimal requirements. The vendor's response must include responses to
the services outlined below in the format shown herein.
3
<PAGE>
Page 4 BIDDER:
Bid No.
A. The vendor will provide a "State of the Art", fully mobile, operating
room truck with the following specifications:
1. Two completely equipped operating rooms
2. Completely equipped recovery room space to recover up to five
patients at any given time
3. Two ambulatory surgical stations (recliners and/or gurneys)
4. Admission/reception area
5. Pre-op prep area
6. Staff dressing and lounge
7. Restrooms
8. Work room/utility room (clean and dirty)
9. Portable X-ray equipment
10. C-Arm capability
11. Anesthesia work area
12. Storage for equipment
13. Two flash autoclaves
14. 0ne steam sterilizer
15. One gas sterilizer or equivalent
16. Anesthesia equipment including but not limited to
a. two anesthesia machines
b. re breathing circuits
17. Dynamap BP machine
18. Cardiac monitor for each operating room and for each recovery area
19. Minimum of five (5) IV stands or tracks
20. Arterial pump(s)
21. IV pump(s)
22. Stairs on both sides of the trailer
23. Wheel chair lift
24. Surgical Equipment, instruments, supplies, including specialty
equipment and supplies and instrumentation as follows:
a. General major & minor surgical instrument &linen packs
setups( both rooms)
b. Major & minor plastic surgery instrument & linen pack setups
(both rooms)
c. Major & minor orthopedic surgery instrument & linen pack
setup (one room)
d. Major GYN surgery instrument & linen pack setup (one room)
e. Minor ENT surgery instrument & linen pack setup (both rooms)
f. Major ENT surgery instrument & linen pack setup (one room)
g. Major dental surgery instrument & linen pack setup (one room)
h. Minor prosthetics setup (will discuss further upon award )
25. Dictating equipment
26. Policies and procedures including:
a. Risk Management
b. Quality management
c. Infection control
d. Safety
e. Sterilization
f. Quality control testing logs
g. Material Safety Data Sheets
h. Emergency care
i. Disaster procedures
27. Laboratory facilities for on-site CBC's, cross matching, UA
cultures, utilizing dipstick technology, and blood storage
facilities. The laboratory and it's personnel shall follow and
4
<PAGE>
Page 5 BIDDER:
Bid No.
adhere to guidelines as specified by CLIA act of 1967 and
Amendments of 1988. Laboratory personnel shall be provided by the
vendor.
28. Emergency Equipment and drugs for the following (Please note
medications will be provided through the Department's Central
Pharmacy). DOC Drug Formulary will available
- upon award:
a. Cardiac arrest
b. Respiratory Arrest
c. Seizures
d. Malignant hypothermia
B. The Vendor will provide a trailer with a space requirement not greater
than 53 feet long and 30 feet wide. The Vendor shall provide
documentation of licensure and certification that trailer(s) provided
are authorized to conduct surgery.
C. The vendor will provide 208 three phase 200 amp service along with a
five wire cable assembly, with a five in one connector at the trailer
end. The trailer must be grounded by a 5/fl inch grounding rod and
cable. Grounding padding for trailer and any other grounding material
outlined shall be provided by the vendor. A back up generator must be
provided by the vendor in cases of power outages, power surges, severe
weather, etc. The back up generator will service lighting and equipment
needed in the Operating rooms recovery area and blood storage area.
D. The vendor will furnish a standard water hose connection for water
supply with an adequate filtering and/or purification system.
r. The trailer must be equipped with a minimum of a 100 gallon gray water
tank and a 100 gallon black water tank and a standard three inch hose
connection for drainage.
F. Repairs, resulting from damage or injury to the tractor and trailer or
its contents, are the responsibility of the vendor. The vendor must
maintain preventive maintenance logs. DOC reserves the right to review
said logs as deemed necessary.
G. The vendor's trailer must be wired to accommodate a telephone system.
H. The vendor will provide, at all visits 7a.m. to 5p.m. to DOC prison
facilities, the following personnel licensed and/or certified to
practice in the State of North Carolina:
1. Minimum of two nurses to serve as recovery room and OR
circulators
2. 0ne medical clerk
3. 0ne orderly
4. One Certified Operating Room Technician (CORT)
5. 0ne anesthesiologist and/or one nurse anesthesiologist with
supervision of an anesthesiologist.
6. One Laboratory technician
PLEASE NOTE: THE VENDOR WILL BE HELD RESPONSIBLE AND LIABLE FOR
THEIR EMPLOYEES.
I. The vendor will provide a Class A-CDL driver to move the operating room
truck from location to location. The vendor's driver must adhere to all
Federal and State DOT regulations regarding drug testing and license
renewal. The vendor will be held responsible for any fines and/or fees
incurred by it's driver for failure to adhere to these guidelines.
5
<PAGE>
Page 6 BIDDER:
Bid No.
J. The vendor shall provide staff to fasten sections of trailer together.
Assembly shall be completed within four(4) hours to make truck
operational at designated DOC location at no additional cost to the
Department.
K. Upon award of this contract, the vendor shall provide to the
Department, within 15 days of beginning services, proof of licensure,
certification and experience of all personnel (including driver) and
must maintain licensure expiration files. Failure to comply with this
component will be cause for contract termination for cause.
L. Vendor shall not employ persons with a history of criminal convictions
of felonies, to work under this contract, without receiving written
approval from the Department, stating its approval to said persons.
M. The vendor must conduct criminal background checks on all employees
working under this contract and submit evidence to the Department with
10 days of commencing services, upon award of this contract.
N. The vendor will immediately remove any employee who is deemed by the
Department behaving in a manner that is either detrimental to the
patient or to the Staff. This will include but not limited to;
offensive language, harassment, threats, use of drugs or alcohol.
0. The vendor will adhere to all rules, regulations and requests of DOC
custody and medical services personnel. The Department will provide a
copy of its policy and procedures to the awarded contractor.
P. The vendor shall include as part of their proposal, their current TQM
activities and how these activities will interface with the DOC's. The
awarded vendor will be required to attend quarterly TQM meetings with
members of the DOC TQM Committee.
Q. Upon award, the vendor shall contact the Department's current providers
of the following services and submit a written plan for interfacing
with these providers, to DOC, within 10 days of commencing work:
radiology, imaging, laboratory, infusion therapy and pharmacy services.
DOC reserves the right to approve or reject the interfacing ability
written plan.
R. The vendor shall provide monthly reports of total volume facility
utilization by ICD-9-CM as well as CPT code. The vendor shall also
provide monthly reports of anesthesia and a monthly report of charges
to DOC for services. All reports are due on the 15t" of the month
following the month being reported. These reports will be forwarded to
DOC's Asst. Director of Health Services or his designee, located at 831
W. Morgan Street, Raleigh, N C 27603.
S. In cases where an incident, involving DOC inmate and/or staff member,
has occurred, DOC incident reports must be completed by the vendor's
personnel, prior to the vendor's staff leaving, at the close of the
shift on which the incident occurred.
T. The vendor may not experience more than two consecutive days and/or
three or more none consecutive days down time [this includes equipment
(unless otherwise specified herein), supplies, etc and/or personnel] in
a thirty day period of scheduled operating days. Should down time
exceed the time stipulated herein, the vendor will forfeit payment for
said month for all services and reimburse DOC for any services provided
at an alternate location including custody and travel costs. At the
option of the vendor, a second trailer of the same caliber as the
regularly scheduled trailer, along with personnel, may be provided to
DOC during this down time, at no additional cost to DOC.
U. Down time for on-board laboratory equipment and portable x-ray
equipment must meet DOC standards for mobile x-ray and laboratory
services (see Attachment #3). Should down time exceed those standards,
the vendor will be held responsible for providing those services, at no
additional cost to DOC.
6
<PAGE>
Page 7 BIDDER:
Bid No.
V. The following is the schedule for utilization of the operating room
truck:
1. Central Prison, Monday through Wednesday, weekly, 7a.m.to 5p.m. ,
PLEASE NOTE: DOC RESERVES THE RIGHT TO ADD ADDITIONAL LOCATIONS TO THIS
CONTRACT AS NEEDED.
W. The vendor may not schedule surgery on a DOC holiday (Attachment #2),
however, the vendor will add an additional work-day during the week of
the holiday if volume necessitates such scheduling.-1
X. The vendor shall utilize DOC contracting facilities and transportation
contractors when emergencies necessitate moving a patient from the
Operating Room to an intensive care unit. Upon award of this contract,
the awarded vendor shall provide written agreement to use DOC
facilities and contractors.
Y. The vendor is required to carry malpractice insurance, general
liability insurance, property damage insurance and automobile insurance
for its employees, as stipulated herein.
Z. The level of surgery to be performed on the vendor's truck is as
follows: General major surgery up to major vascular procedures.
Transplants, major thorasic procedures, bypasses etc, will not be
performed under any circumstances.
AA. The vendor's truck will be leased to DOC over a five year period of
time. One year with an option to renew an additional four years in one
year increments.
BB. The attached Alcohol and Drug Free Workplace Policy must be reviewed
and the signature page must be returned with the Vendor's response to
this solicitation (see Attachment # 1).
CC. Please check the appropriate boxes:
1. Are members of vendor's personnel retired State of North Carolina
employees?
/ / Yes / / No
2. Are members of the vendor's personnel currently full time State of
North Carolina employees?
/ / Yes / / No
DD. Initial transport fees of the truck from vendor's location to DOC's
location and transport fees for removal of trailer at the end of
contract term will be the responsibility of the Vendor. These fees will
include but not limited to; Driver's salary, Interstate/intrastate
transportation fees, Weight fee/fines, permits, etc.
EE. The vendor shall include in their proposal a preliminary plan for
transferring emergently ill patients to the local DOC identified
hospital.
FF. The vendor will not charge STAT fees for services provided on board the
Vendor's truck(i.e. laboratory services, x-ray services etc).
RESPONSIBLITIES OF THE NORTH CAROLINA DEPARTMENT OF CORRECTION (DOC):
A. DOC will provide all medications(including IV medication) needed and
specified herein.
B. DOC will provide all medical waste disposal services at each DOC
location. The vendor is responsible for the removal and transport of
all medical waste to the designated disposal area at their own expense.
7
<PAGE>
Page 8 BIDDER:
Bid No.
C. DOC will provide surgeons and conduct surgical clinics and conduct
follow-up procedures
D. DOC will assist the vendor's orderly in transporting patient(s)to
upstairs post-recovery area, located within Central Prison Hospital.
E. DOC will provide vendor with medical forms, disciplinary action forms,
and time sheets for vendor's personnel,
F. DOC will provide copy of current TQM guidelines
G. DOC will provide and conduct an overview orientation to vendor
personnel on the start date. New/replacement employees of the vendor
will be oriented upon before starting.
H. DOC will provide custody officer supervision services, for some inmate
patients, based on the inmate patient's custody level. The custody
levels are as follows:
1. Minimum ( no custody offer will be provided)
2. Medium (custody officer will be provided)
3. Close (custody offer will be provided)
4. Maximum (custody officer(s) will be provided)
I. DOC will furnish potable water
IV. AWARD CRITERIA:
Award of this contract will be based on the following:
A. Ability to meet requirements outlined herein
B. References
C. Comparison of current "State of the Art" fixed operating rooms to
vendor's proposal
D. Evidence of quality management and risk management programs
E. Ability to meet the schedule requirements set forth in this IFB
F. Cost
V. COST PROPOSAL:
Vendors responding to this IFB shall present their cost proposal as
follows. Failure to present the cost proposal as specified below may be
cause for rejection of a vendor's proposal in its entirety. Cost
proposal must be submitted in a SEPARATE SEALED ENVELOPE labeled with
the words "Cost Proposal".
A. Comprehensive Monthly Human Resources FLAT RATE based on the
following personnel:
1. Two Nurses
2. Orderly
3. CORT
4. Driver
5. Anesthesiologist
6. Nurse Anesthesiologist
7. Laboratory technician
B. Discount or premium percentage price for any surgical procedures
performed on Tractor/trailer by CPT estimated monthly value of
$500,000.00
C. Additional or extra costs not accounted for in the above
categories. This must be accompanied by justification for said
additional costs. DOC will provide preliminary listing of
additional cost at Mandatory Pre-proposal conference.
8
<PAGE>
Page 9 BIDDER:
Bid No.
Low Bid will be calculated using the following formula:
(32 hours times item A times 4 weeks + $500,001.00 times item B
percentage)times 12 = Low bid
VI. INSTRUCTIONS TO VENDORS:
A. THE PROCUREMENT PROCESS:
The following is a general description of the process by which a
firm will be selected to provide required services.
1. Request for Proposals are sent to prospective Vendors.
2. Proposals will be received from each Vendor in a sealed
package, one (1) original and three (3) copies.
3. The original proposal shall be signed and dated by an
official authorized to bind the firm.
4. Proposals must be received by the Issuing Agency not later
than the date and time specified on the cover sheet of this
RFP. Each sealed package shall be identified (Technical
Proposal or Cost Proposal) and shall bear the name of the
Vendor, RFP number and the closing date for proposal
submission.
5. At that date and time the package containing the proposals
from each responding firm will be opened and the name of each
firm will be announced publicly.
6. At their option, the evaluators may request oral
presentations or discussions with any or all Vendors for the
purpose of clarification or to amplify the materials
presented in any part of the proposal. However, Vendors are
cautioned that this provision is not mandatory; therefore,
all proposals shall be complete and concise and reflect the
most favorable terms available from the Vendor.
7. Vendors are cautioned that this is a Request Or Offers, not a
Request to Contract, and the State reserves the RIGHT TO
REJECT ANY AND ALL OFFERS when such rejection is deemed to be
in the best interest of the State.
B. Evaluation of Proposals:
1. The technical proposal will be evaluated first.
2. Upon completion of the technical evaluation, cost proposals
of those firms whose technical proposals have been deemed
acceptable, shall be opened and evaluated. The total cost
offered by each firm will be tabulated and become a matter of
public record. Interested parties are cautioned; however,
that these costs and their components are or may be subject
to further evaluation, and therefore may not be an exact
indicator of a Vendors pricing position.
3. The technical proposal will be evaluated and the following
factors, not listed in order of importance, will be
considered in selecting a Vendor:
a. Overall experience, qualifications,and credentials of
the Vendor
b. Experience and/or credentials in providing the services
described herein.
c. References of at least three other facilities for whom
the describe services have been provided.
d. Corporate and financial stability of the Vendor.
e. Pricing
f. The company's overall capability to provide services
delineated in this RFP.
9
<PAGE>
Page 10 BIDDER:
Bid No.
g. The overall quality of the proposal relative to those
offered by other prospective Vendors.
4. The award of a contract to one Vendor does not mean that the
other proposals lack merit, but that will all factors
considered, the chosen proposal was deemed to provide the
best value to the Department of Correction.
C. REQUIRED PROPOSAL CONTENT:
1. Qualified Vendors are encouraged to submit a proposal for
performing the services described herein. All proposals must
be submitted strictly in accordance with the requirements of
the Request for Proposal. Failure to include any required
information in the proposal shall, at the sole discretion of
the Department of Correction, cause rejection in other parts
of this RFP; Vendors shall furnish the following information:
a. Organizational structure of the firm including its
relationship to any parent firms, sister firms or
subsidiaries.
b. The Vendor's latest audited financial statements; or tax
returns if financial statements are not available. An
irrevocable letter of credit may be substituted for this
requirement.
c. Any additional information the Vendor desires to be
considered in the evaluation process.
d. A minimum of three references for whom the Vendor has
provided service.
e. A brief description of the administrative plan to
support the operation as described herein.
f. Complete answers and addressing of all requirements
within this RFP.
VII. GENERAL CONDITIONS FOR SUBMITTING PROPOSALS:
All proposals are subject to the terms and conditions outlined herein.
All responses shall be controlled by such terms and conditions and the
submission of other terms and conditions, price lists, catalogs, and/or
other documents as part of a Vendor's response will be waived and have
no effect either on this Request for Proposal or subsequent purchase
order resulting from this solicitation. Vendor specifically agrees to
the conditions set forth in the above paragraph by an authorized
signature to the proposal.
A. AWARD OR REJECTION:
All qualified proposals will be evaluated and the award made to
those Vendors whose proposal is judged by the Department of
Correction to constitute the best value offered for the purpose
intended. The Department of Correction reserves the unqualified
right to reject any or all offers if determined to be in its best
interest.
B. DECLINE TO OFFER:
Any Vendor which receives a copy of the RFP, but which declines to
make an offer is requested to send a formal "Decline to Offer" to
the Issuing Office. Failure to respond as requested may subject
the Vendor to removal from consideration o n future requests.
C. COST FOR PROPOSAL PREPARATION:
Any costs incurred by the Vendor in preparing or submitting offers
are the Vendor's sole responsibility; The N.C. Department of
Correction will not reimburse any Vendor for any costs incurred
prior to the award.
10
<PAGE>
Page 11 BIDDER:
Bid No.
ELABORATE PROPOSALS:
D. Elaborate proposals in the form of brochures or other
presentations beyond that necessary to present a complete and
effective proposal are not desired.
E. COMPETITIVE PROPOSALS:
Pursuant to the provision of G.S. 143-54 and under penalty of
perjury, the signer of this proposal certifies this proposal has
not been arrived at collusively nor other wise in violation of
Federal or North Carolina antitrust laws. All proposals must be
signed by the owner of the firm.
F. ORAL EXPLANATIONS:
The Department of Correction will not be bound by oral
explanations or instructions given at any time during the
competitive process or after award.
G. EXECUTIVE ORDER NUMBER 77 (AMENDMENT TO EXECUTIVE ORDER NUMBER
34):
Pursuant to Article 3 and 3C, Chapter 143 of We North Carolina
General Statutes and Executive Order Number 77, the State invites
and encourages participation in this procurement by businesses
owned by minorities, women and the disabled including utilization
as subcontractors to perform functions under this Request for
Proposal.
H. LAWS:
The Vendor shall comply with laws, ordinances, codes, rules and
regulations bearing on the conduct of work including those
Federal, State and Local agencies having jurisdiction. This shall
include, but not limited to, minimum wages, labor and equal
employment opportunity laws.
I. TAXES:
No taxes shall be included in any proposal.
J. REFERENCE TO OTHER DATA:
Only information which is received in response to this RFP will be
evaluated; reference to information previously submitted will not
suffice.
K. PROPRIETARY OR OTHER "CONFIDENTIAL" INFORMATION:
Trade secrets or similar proprietary data which the Vendor does
not wish disclosed to other than personnel involved in the
evaluation or contract administration will be kept confidential to
the extent permitted by NCAC T01:05B.1501 and G.S.132-1.3 if
identified as follows:
Each page shall be identified in boldface at the top and
bottom as "Confidential". Any section of the proposal,
which is to remain confidential, shall also be marked in
boldface on the title page of that section. Cost
information may not be deemed confidential.
L. TITLES: .
Titles and headings in this RFP and any subsequent contract are
for convenience only and shall have no binding force or effect.
M. TIME FOR ACCEPTANCE:
Each proposal must state that it is a firm offer which may be
accepted within a period of 90 days, although the contract is
expected to be awarded prior to that time, the 90 day period is
requested in order to allow for unforeseen delays.
11
<PAGE>
Page 12 BIDDER:
Bid No.
N. EXCEPTIONS:
Any deviation from specifications indicated herein must be clearly
pointed out; otherwise, it will be considered that the proposal
offered is in strict compliance with these specifications, and the
successful Vendor will be held responsible therefore. Deviations
must be explained in detail on an attached sheet(s). Deviations
will also subject the Vendor's proposal to possible rejection.
O. ADVERTISING:
In submitting the proposal, the Vendor agrees not to use the
results therefrom as a part of any news release or commercial
advertising.
P. CONFIDENTIALITY OF PROPOSALS:
In submitting the proposal, the Vendor agrees not to discuss or
otherwise reveal its technical or cost information to any other
sources, government or private, until after the award of the
contract. Vendors not in compliance with this provision may be
disqualified, at the option of the Department of Correction, from
contract award. 0nly discussions authorized by the Issuing Agency
are exempt from this provision.
Q. RIGHT TO SUBMITTED MATERIALS:
All responses, inquiries, or correspondence relating to or in
reference to this RFP, and all other reports, charts, displays,
schedules, exhibits, and other documentation submitted by the
Vendors will become the property of the Department of Correction
when received.
R. VENDOR'S REPRESENTATIVE:
Vendors shall submit the name, address, and telephone number of
the person(s) with the authority to bind the Vendor and answer
questions or provide clarification concerning the Vendor's
proposal.
S. EXECUTION:
Failure of the Vendors) to sign and return the attached Execution
of Proposal page with their proposal will render their proposal
invalid and will be cause for rejection.
T. ORDER OF PRECEDENCE:
In cases of conflict between specific provisions in this RFP, the
order of precedence shall be:
1. Scope of services
2. Instructions to vendors
3. General terms for submitting proposals
4. Terms and conditions of the resulting contract
VIII. TERMS AND CONDITIONS:
This Request for Proposal and any documents incorporated specifically
by reference on the purchase order represents the entire agreement
between the parties. This Request for Proposal, any addenda and the
Vendor's proposal are incorporated herein, or unless superseded by
applicable Federal and/or State statutes of limitation.
A. CONTRACT PERIOD:
The contract service shall be for a period of one- (1) years and shall
begin when a purchase order has been issued by the Department of
Correction, subject to the continuation of the program and the
availability of funds. The Department of Correction reserves the right
to extend the contract for an additional period of four (4) years in
one-year increments.
12
<PAGE>
Page 13 BIDDER:
Bid No.
B. DEFAULT:
Should the Department of Correction determine that the Contractor is
not satisfactorily performing the contract, the Department of
Correction may, by thirty days written notice to the Contractor, demand
that the Vendor provide service(s) in question in a satisfactory
manner. If the Contractor fails to perform the required services within
thirty days after receipt of the notice from the Department of
Correction specifying each failure, the Department of Correction may
terminate the whole or part of the contract in question. In the event
the Department of Correction terminates this contract in whole or part
as provided herein due to default, it may procure, in such a manner as
it deems reasonable and appropriate, such services as required by this
contract condition and the Contractor shall be required to continue the
performance of this contract to the extent not terminated under the
provisions of this clause. The Contractor will also be responsible for
any excess cost occasioned through the default.
C. ESCALATION CLAUSE:
Prices offered herein shall be firm for a period of one (1) year from
the date of initial contract performance. Price may only be altered at
We extension review.
D. SITUS:
The place of all contracts ,transactions, agreements, their situs and
forum, shall be Wake County, where all matters, whether sounding in
contract or tort, relating to the validity, construction,
interpretation, and enforcement shall be determined.
E. GOVERNING LAWS:
This contract is made under and shall be governed by and construed in
accordance with the laws of the State of North Carolina.
F. WAIVER:
No covenant, condition, duty, obligation, or undertaking contained in
or made a part of the contract will be waived except by the written
agreement of the parties, and forbearance or indulgence in any other
form or manner by either party in any regard whatsoever shall not
constitute a waiver of the covenant, condition, duty, obligation, or
undertaking to be kept, performed, or discharged by the party to which
the same may apply; and until complete performance or satisfaction of
all such covenants, conditions, duties, obligations, and undertakings,
and the other party shall have the right to invoke any remedy available
under law or equity, notwithstanding any such forbearance or
indulgence. Any consent by any party to, or waiver of, a failure by the
other, whether express or implied, shall not constitute a consent to,
waiver of, or excuse for any other different or subsequent failure.
G. INDEMNIFICATION AGREEMENT:
The Contractor agrees with the Department of Correction that it will
protect, indemnify and hold the Department of Correction harmless from
and against all liabilities, actions, damages, claims, demands,
judgements, losses, defense costs, expenses, or including reasonable
attorney's fees, and will, if requested, defend the Department of
Correction in any suit, including appeals, for personal injury to, or
death of, any person or persons, loss or damage to property, or civil
or criminal fines or penalties, to the extent caused by the willful
misconduct or negligent acts,errors or omissions of the Contractor, its
agents or employees acting within the scope of their employment. The
Department of Correction shall promptly notify the Contractor of the
assertion of any claim against which it asserts a right to be
indemnified hereunder, shall,atits option, give the Contractor the
opportunity to defend such claim, and shall not settle such claim
without approval of the Contractor, which approval shall not be
unreasonably withheld. These indemnification provisions are for the
protection of the Department of Correction only and shall not create
any liability to third parties.
13
<PAGE>
Page 14 BIDDER:
Bid No.
H. TERMINATION:
If through any cause, the Contractor shall fail to fulfill in a timely
manner the obligations under this agreement, the Department shall
thereupon have the right to terminate this contract by given thirty
(30) days written notice to the Contractor and specifying the effective
date thereof. In that event, at the option of the Department, the
Contractor shall be entitled to receive just and equitable compensation
for any satisfactory work performed. Notwithstanding, the Contractor
shall not be, relieved of liability to the Department for damages
sustained by the Department by virtue of any breach of this agreement,
and the Department may withhold any payment due the Contractor for the
purpose of set off, until such time as the exact amount of damages due
to the Department, from such breach, can be determined.
The Department may terminate this agreement at any time, with or
without cause, by thirty days notice in writing from the Department to
the Contractor. If the contract is terminated by the Department as
provided herein, the Contractor will be paid for services
satisfactorily performed. It is understood and agreed between the
Contractor and the Department that payment of compensation specified in
this agreement, its continuation or any renewal thereof, is dependent
upon and subject to the allocation or appropriation of funds to the
Department for the purpose set forth in this agreement.
In the event, the Department terminates this contract for cause, the
Contractor must remove all supplied equipment for the Department's
location within twenty-four (24) hours of receipt of written
notification.
I. FUNDING:
All terms and conditions of this contract and the subsequent purchase
order are dependent upon and subject to the allocation of funds for the
purpose set forth and the contract will be automatically terminated if
funds cease to be available. If a Certificate of Need (CON) is deemed
necessary, this contract is also contingent upon that approval.
J. BANKRUPTCY:
Upon the filing for a judgement of bankruptcy or insolvency by or
against the Vendor, the Department of Correction may terminate this
contract for cause.
K. CONFIDENTIALITY OF DATA:
Contractor agrees to protect the confidentiality of any files, data or
other materials provided by and to the Department and restrict their
use to purposes of performing this contract and none other. Any
information, data, instruments, documents, studies or reports given to
or prepared by or assembled by the Contractor under this agreement,
shall be kept as confidential and not divulged or made available to any
individual or organization without the prior written consent of the
Department.
L. CARE OF DATA:
Contractor shall take all steps necessary to safeguard any data, flies,
reports, or other information from loss, destruction or erasure. Any
costs or expenses of replacing, or damages resulting from the loss of
such data shall be borne by the Contractor when such loss or damage
occurred through its negligence. .
M. LIABILITY
The Contractor(s) shall assume liability for damage or loss resulting
from the wrongful act(s) and/or negligence of its employees while they
are on State premises. The Contractor or their insurer shall reimburse
the Department of Correction for any such damages or loss within thirty
(30)days after a claim is submitted.
14
<PAGE>
Page 15 BIDDER:
Bid No.
N. INSURANCE REQUIREMENTS:
The Contractor shall, at its sole cost and expense, procure and
maintain in full force and effect during the term of the contract the
following:
1. Worker's Compensation Insurance covering all of the Contractor's
employees who are engaged in any work under the contract. The
coverage should be the statutory limits.
2. Public Liability in the amount of $5,000,000.00 and Property
Damage Insurance in the amount of $ 1,000,0 0 0.0 0 (construed as
including the Contractor's Protective Insurance) and Malpractice
Insurance in the amount of $1,000,000.00 per incident and
$3,000,00O.OOin aggregate, and shall protect the Contractor and
any Subcontractor performing work covered on the contract for
claim for property damage or bodily injury, including death, as
well as from claims for personal damages, which may arise from
operations under the contract, whether such operations be by the
Contractor or any Subcontractor or by anyone directly or
indirectly employed by either of them.
3. Automobile bodily injury and motor vehicle liability when the
service to be performed requires the use of motor vehicles.
Contractor shall furnish to the Department of Correction
certificates evidencing this insurance coverage prior to
commencing work and the issuance of a Purchase Order. All
certificates of insurance shall provide that the insurance company
will give the Department of Correction thirty (30) days written
notice prior to cancellation or any change in the stated coverage
of any insurance.
Vendor's insurance carrier shall provide the Department of
Correction with a waiver of subrogation for all policies.
O. EQUAL EMPLOYMENT OPPORTUNITY STATEMENT:
All provisions, relative to Equal Employment Opportunity for all
persons without regard to race, color, religion, sex or national origin
shall be incorporated as part of the resulting contract.
P. ASSIGNMENT:
Contract(s) resulting from this solicitation shall not be assigned in
whole or part, except as listed herein. However, financial rights may
be assigned in accordance with the rules and regulations of the
Division of Purchase and Contract.
Q. SUBCONTRACTING:
The Contractor may subcontract portions of the work provided that they
clearly indicate what work they plan to subcontract and to whom and
that all information required about the Prime Contractor is also
required for each proposed Subcontractor. Subcontractors must meet all
requirements of the Prime Contractor including insurance, except
bonding.
R. PRORATING RATES:
All prorating of rates and/or reductions in services shall be based on
a thirty- (30) day month.
S. PROTEST PROCEDURES:
A party wanting to protest a contract awarded pursuant to this
solicitation must submit a written request to the Director of
Departmental Purchasing & Services, 2020 Yonkers Road, Raleigh,
N.C.27604.This request must be received in the Division of Departmental
Purchasing and Services office within thirty (30) consecutive calendar
days from the date of the contract award, and must contain specific
sound reasons and any supporting documents for the protest.
NOTE: Contract award notices are sent only to those
15
<PAGE>
Page 16 BIDDER:
Bid No.
actually awarded contracts, and not to every person or firm responding
to this solicitation. Vendors may call (919) 715-3250 to obtain a
verbal status of contract award. All protests will be handled pursuant
to the North Carolina Administrative Code, Title 1, Department of
Administration, Chapter 5, Purchase and Contract Section 513.1519.
T. SUBMISSION OF INVOICES:
Vendor may submit a monthly invoice for services rendered, unless
otherwise instructed, to: North Carolina Department of Correction
Accounting Section FLO. Box 29540 Raleigh, NC 27626-0540 (919) 733-7704
Payments will be processed within thirty (30) days after invoices are
approved by the Department of Correction. Payments will not be
unreasonably withheld. All charges submitted by the Vendor for payment
using ICD-9 codes and CPT codes will be reviewed by DOC's Adjudication
Section prior to issuing payment.
16
<PAGE>
Page 17 BIDDER:
Bid No.
ATTACHMENT 1
DEPARTMENT OF CORRECTION Section No.: 3 ,
-----------------
PERSONNEL MANUAL Page No.: 57
--------------------
Effective: FEBRUARY 1, 1992
---------------------
SUBJECT: ALCOHOL/DRUG-FREE WORK PLACE POLICY
Policy
It is the policy of the Department of Correction to provide a work environment
free of alcohol and drugs in order to ensure the safety and well being of
employees, correctional clientele, and the general public. All employees of the
Department of Correction, including permanent full-time, trainee, permanent
part-time, permanent hourly, probationary, and temporary shall abide by this
policy.
Purpose
This document is intended to advise mangers and employees of the guidelines of
an alcohol/drug free work place, and to set out the penalties for violation(s)
of the guidelines.
Procedures/Operational Guidelines
All employees of the Department of Correction are expected to be physically and
mentally prepared and able to perform their assigned dudes throughout the
workday. No employee shall report to the work site impaired by or suffering from
the effects of drugs or alcohol.
Individuals reporting for work under the influence or the effects of alcohol
and/or drugs shall be issued discipline, up to and including dismissal,
consistent with the policy governing personal conduct.
No employee shall manufacture, distribute, or dispense controlled substances
(drugs/alcohol) at the work site or away from the work site. N o employee shall
use "across the counter" medication to the point of impairment while at the work
site, or in any situation which may bring discredit to the Department. Use or
abuse shall be viewed as personal misconduct and shall be cause for immediate
disciplinary action u p to and including dismissal.
Possession of an illegal substance in any situation, at work or away from the
work site shall be cause for discipline. Possession of controlled substances,
i.e. Prescription medication or alcohol, must be . in compliance with existing
laws. Violations will result in discipline u p to and including dismissal based
on personal misconduct.
Employees who are arrested, detained, or served a warrant for any alcohol/drug
related incident, at 'e work site or away from the work site have 24 hours to
file a written report of the situation with the work unit supervisor/manager,
i.e. Warden, Superintendent, Branch Manager. The work unit
17
<PAGE>
Page 18 BIDDER:
Bid No.
supervisor/manager shall make a recommendation for appropriate disciplinary
action based on the facts of the case after conducting a thorough investigation.
If sufficient facts cannot be obtained due to pending litigation, the work unit
supervisor/manager shall request, in writing, that any recommendation for
disciplinary action be delayed until the court has disposed of the matter. Once
the legal proceedings have been completed, the employee shall furnish a
certified copy of the court disposition within 48 hours of the judgment. The
recommendation for discipline shall be made at this time, if not previously
addressed.
Any conviction of a drug or alcohol related offense which occurred at the work
site shall be reported to the federal government by the Personnel Office;
therefore, such offenses shall be reported to the Personnel Office by the
appropriate manager so that the Personnel Office may comply with the
requirement.
The Department of Correction utilizes the State Employee Assistance Program
(EAP)administered through the Office of State Personnel. The EAP provides
employees with a comprehensive referral service to aid in coping with o r
overcoming personal problems, including drug and alcohol problems. Consultants
with the State EA P will provide managerial/supervisory training and coordinate
employee orientation.
This policy shall be posted in an accessible area for employee review and shall
be periodically reviewed in staff meetings and at line up. In addition, each
present employee and all new employees shall be given a copy of this policy for
their information.
18
<PAGE>
Page 19 BIDDER:
Bid No.
NORTH CAROLINA DEPARTMENT OF CORRECTION
ALCOHOL/DRUG FREE WORK PLACE POLICY
STATEMENT OF UNDERSTANDING
The Contractor certifies by its signature below that it has been furnished a
copy of the North Carolina Department of Correction's Alco h of/Drug Free Work
Place Policy and will abide by the standards set forth in this policy.
Signature:
-------------------------------------------
Title:
-----------------------------------------------
Date:
------------------------------------------------
19
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Page 20 BIDDER:
Bid No.
ATTACHMENT 2
NORTH CAROLINA STATE HOLIDAYS
1998 STATE HOLIDAY SCHEDULE
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------
Holiday Observance Date(s) Day(s) of the Week
- ----------------------------------------------------------------------------------------
<S> <C> <C>
New Year's Day January 1,1998 Thursday
- ----------------------------------------------------------------------------------------
Martin Luther King Jr's Birthday January 19,1998 Monday
- ----------------------------------------------------------------------------------------
Good Friday Apri110,1998 Friday
- ----------------------------------------------------------------------------------------
Memorial Day May 25,1998 Monday
- ----------------------------------------------------------------------------------------
Independence Day July 3,1998 Friday
- ----------------------------------------------------------------------------------------
Labor Day September 7,1998 Monday
- ----------------------------------------------------------------------------------------
Veteran's Day November 11,1998 Wednesday
- ----------------------------------------------------------------------------------------
Thanksgiving November 26 & 27,1998 Thursday & Friday
- ----------------------------------------------------------------------------------------
Christmas [December 24 & 25,1998 Thursday & Friday
- ----------------------------------------------------------------------------------------
</TABLE>
1999 STATE HOLIDAY SCHEDULE
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------
Holiday Observance Date (s) Day(s) of the Week
- ----------------------------------------------------------------------------------------
<S> <C> <C>
New Year's Day January 1,1999 Friday
- ----------------------------------------------------------------------------------------
Martin Luther King Jr's Birthday January 18,1999 Monday
- ----------------------------------------------------------------------------------------
Good Friday April 2,1999 Friday
- ----------------------------------------------------------------------------------------
Memorial Day May 31,1999 Monday
- ----------------------------------------------------------------------------------------
Independence Day July 5,1999 Monday
- ----------------------------------------------------------------------------------------
Labor Day September 6,1999 Monday
- ----------------------------------------------------------------------------------------
Veteran's Day November 11,1999 Thursday
- ----------------------------------------------------------------------------------------
Thanksgiving November 25 & 26,1999 Thursday & Friday
- ----------------------------------------------------------------------------------------
Christmas December 24 & 27,1998 Friday & Monday
- ----------------------------------------------------------------------------------------
</TABLE>
20
<PAGE>
PAGE: 21 BIDDER:
Bid No.
ATTACHMENT #3
TURNAROUND TIME FOR LABORATORY SERVICES:
1. Results of routine nature, such as, general routine chemistries will in
most cases be transmitted within 24-hours of the time the specimen is
submitted.
2. Results of tests performed on specimens of a special nature will in
most cases be transmitted within three to five working days .
3. Stat lab analysis shall be available as needed on-site.
4. Vendor must be equipped with data receiving equipment as long as the
number of test reports and account logistics justify the need for the
equipment to assure earliest delivery of result data.
DOWNTIME PROCEDURE FOR MOBILE X-RAY EQUIPMENT ON-SITE:
Contractor shall describe any contingency clause should the mobile x-ray service
be nonfunctional for a period of time. In the event of the equipment not
working, the contractor must have documented steps of what action will be taken
to insure its rapid return to full operational status, as well as interim action
to assure uninterrupted service.
PLEASE NOTE: ALL AREAS MENTIONED IN THIS ATTACHMENT ARE PROVIDED AT NO
ADDITIONAL COST TO THE DEPARTMENT.
21
<PAGE>
EXHIBIT 11.1
U.S. MEDICAL GROUP, INC.
COMPUTATION OF EARNINGS PER COMMON
AND COMMON EQUIVALENT SHARES
FOR THE YEARS ENDED DECEMBER 31, 1999 AND 1998
<TABLE>
<CAPTION>
1999 1998
---- ----
<S> <C> <C>
Shares outstanding at beginning of period 13,575,380* 13,575,380*
Weighted average of common shares issued
during the period -- --
----------- -----------
Weighted average of common shares
outstanding during the period 13,575,380 13,575,380
Stock options and warrants outstanding 58,285 --
Shares used in computing earnings per
common share 13,633,665 13,575,380
Earnings per common share ($233,475/13,633,665) $ .02
-----------
Earnings per common share ($705,915/13,575,380) $ .05
------------
------------
</TABLE>
* restated to give effect to merger
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<CURRENCY> US DOLLARS
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> DEC-31-1999
<EXCHANGE-RATE> 1
<CASH> 22,763
<SECURITIES> 0
<RECEIVABLES> 548,669
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 584,762
<PP&E> 3,703,542
<DEPRECIATION> 410,389
<TOTAL-ASSETS> 3,890,151
<CURRENT-LIABILITIES> 1,010,305
<BONDS> 0
0
0
<COMMON> 13,575
<OTHER-SE> 1,117,973
<TOTAL-LIABILITY-AND-EQUITY> 3,890,151
<SALES> 2,041,034
<TOTAL-REVENUES> 2,041,034
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 1,403,338
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 81,562
<INCOME-PRETAX> 816,134
<INCOME-TAX> 382,659
<INCOME-CONTINUING> 233,475
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 233,475
<EPS-BASIC> .02
<EPS-DILUTED> .02
</TABLE>
