SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED) APRIL 15, 1998
FIRST MEDICAL GROUP, INC.
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(EXACT NAME OF REGISTRANT AS SPECIFIED IN CHARTER)
DELAWARE 1-155 13-1920670
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(STATE OR OTHER JURISDICTION (COMMISSION (IRS EMPLOYER
OF INCORPORATION) FILE NUMBER) IDENTIFICATION NO.)
1055 WASHINGTON BOULEVARD, STAMFORD, CT 06901
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(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE (203) 327-0900
N/A
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(FORMER NAME OF FORMER ADDRESS, IF CHANGED SINCE LAST REPORT)
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ITEM 2. DISPOSITION OF ASSETS
On April 14 and 15, 1998 First Medical Group Inc., through certain of
its wholly owned subsidiaries completed the sale of its Florida operations which
amounted to the sale of all of the assets of its nine outpatient centers listed
below and its management agreements for the South Florida multi-specialty
practices. The total sales price determined through arms - length negotiations,
was approximately $6.75 million, the proceeds of which were used to pay off an
existing loan with First Union Bank in the amount of $2,827,812, money owed to
Humana Inc., in the sum of $1,227,045 and various accounts payable and other
accrued liabilities in the amount of $1,483,541. The balance of the proceeds
will be used for general working capital requirements.
The following outpatient centers that were sold are as follows:
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OUTPATIENT CENTERS PURCHASER NATURE OF SALE
................................ ...............................................
1071 Cutler Ridge CNU Acquisition Corp. Assets
11000 SW 211 Street
Miami, FL 33189
................................ ...............................................
1081 Kendall CNU Acquisition Corp. Assets
11701 Mills Drive
Miami, FL 33183
................................ ...............................................
1296 Margate CNU Acquisition Corp. Assets
5643 NW 29th Street
Margate, FL 33063
................................ ...............................................
1310 Plantation CNU Acquisition Corp. Assets
6871 W Sunrise Blvd.
Plantation, FL 33313
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2310 Plant City CNU Acquisition Corp. Assets
1703 Thonotossassa Rd.
Suite 300
Plant City, FL 33567
................................ ...............................................
2754 Lutz CNU Acquisition Corp. Assets
217 Crystal Grove Blvd.
Suite 101
Lutz, FL 33549
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2755 South Tampa CNU Acquisition Corp. Assets
3255 S Mac Dill Avenue
Suite #117
Tampa, FL 33629
................................ ...............................................
2756 New Port Richey CNU Acquisition Corp. Assets
4759 US Highway 19
New Port Richey, FL 34652
................................ ...............................................
2885 Spring Hill CNU Acquisition Corp. Assets
4189 Mariner Boulevard
Springhill, FL 34609
................................ ...............................................
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On April 17, 1998 First Medical Group, Inc., ("FMG") sold HallMark
Electrical Supplies Corp., ("HallMark") which was a wholly owned subsidiary of
FMG to Salvatore J. Zizza and the existing management of HallMark for a total
sales price of $1,900,000.00. The purchase price of $1,900,000.00 represented a
cash payment of $750,000.00 and the assumption of $1,150,000.00 worth of debt
and Mr. Zizza's agreement not to compete.
Simultaneously with the sale of HallMark, Mr. Zizza resigned as
Executive Vice President, Chief Financial Officer and Treasurer of FMG and its
subsidiaries. Mr. Zizza continues to serve as a director of FMG.
The total sales price was determined through arms-length negotiations
and unanimously approved by the Board of Directors of FMG with Mr. Zizza
abstaining from the vote. The Board also formed an independent committee of the
Board to determine the fair and reasonable value of HallMark.
ITEM 7. FINANCIAL STATEMENTS AND PRO FORMA FINANCIAL INFORMATION AND
EXHIBITS
b. First Medical Group Inc. unaudited pro forma condensed
balance sheet:
The following unaudited pro forma condensed financial
information gives effect to the transactions described
above as if such events had occurred on January 1, 1997.
This financial information is presented for informational
purposes only and does not purport to represent what
FMG's results of operations would actually have been if
the aforementioned transactions had occurred on the dates
specified or to project FMG's results of operations for
any future periods.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
FIRST MEDICAL GROUP, INC.
Dated: April 29, 1998 By: /s/ Robert A. Bruno
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Robert A. Bruno
Vice President and General Counsel
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FIRST MEDICAL GROUP, INC.
UNAUDITED PRO-FORMA CONDENSED BALANCE SHEET
DECEMBER 31, 1997
<TABLE>
<CAPTION>
HISTORICAL ADJUSTMENTS ADJUSTMENTS PRO-FORMA
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(See Note 1) (See Note 2)
ASSETS
<S> <C> <C> <C> <C>
Cash $ 1,151,416 $ 1,391,602 $ (183,379) $ 2,359,639
Other current assets 19,944,777 (5,442,037) (9,240,545) 5,262,195
Other assets 6,449,192 (2,214,123) (95,128) 4,139,941
Net assets held for disposal - - 1,903,000 1,903,000
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Total assets $27,545,385 $(6,264,558) $(7,616,052) $13,664,775
=========== =========== =========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIT)
Current liabilities $22,505,840 $(10,819,090) $(2,636,343) $ 9,050,407
Other liabilities 6,093,266 (161,345) (4,979,709) 952,212
Shareholders' equity (deficit) (1,053,721) 4,715,877 - 3,662,156
----------- ------------ ----------- -----------
Total liabilities and shareholders'
equity (deficit) $27,545,385 $ (6,264,558) $(7,616,052) $13,664,775
=========== =========== =========== ===========
</TABLE>
NOTE 1:
(a) Recording sale of Florida medical centers for $6.75 million in cash for
certain net assets of $430,049 with difference recorded to retained earnings.
(b) Pay-off loans at bank for $2,827,812 with proceeds from sale and reduce
interest expense by $180,000.
(c) Pay-off amounts due to Humana in Florida and Texas of $1,227,045 with the
proceeds from the sale.
(d) Pay-off amounts due for accounts payable and other accrued liabilities of
$1,483,541 with the proceeds from the sale.
(e) Write-off goodwill of $1,784,074 recorded from the purchase of BMC.
(f) Reclass accrued medical claims payable of $5,442,037 to IBNR receivable.
NOTE 2:
(a) Reclass Hallmark Electrical Supplies Corp. assets and liabilities to net
assets held for disposal of $1,903,000.
