SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event report) May 22, 1997
Commission File Number 0-12516
Dynamic Healthcare Technologies, Inc.
(Exact name of registrant as specified in its charter)
Florida 0-12516 59-3389871
(State or other jurisdiction (Commission File Number) (IRS E.I.N.)
of Incorporation)
101 Southhall Lane, Suite 210, Maitland, Florida 32751
(Address of principal executive offices) (ZIP Code)
(407) 875-9991
(Registrant's telephone, including area code)
None
(Former name of former address, if changed from last report)
This report consists of nineteen (19) pages.
The index to exhibit appears on page eighteen (18).
Page 1
FORM 8-K
DYNAMIC HEALTHCARE TECHNOLOGIES, INC.
May 22, 1997
Item 7.
Financial Statements and Exhibits
The following financial statements are being filed pursuant to
Item 7(a) and (b) of the Registrant's Form 8-K dated May 22, 1997.
(a) Financial Statements of Business Acquired
Index Page Number
Independent Auditors' Report on the financial statements of 3
Dynacor, Inc. as of June 30, 1996, and for the year then ended.
Balance Sheets of Dynacor, Inc. as of June 30, 1996, and 4
March 31, 1997 (unaudited).
Statements of Operations of Dynacor, Inc. for the year ended 5
June 30, 1996, and for the nine months ended March 31, 1996
and 1997 (unaudited).
Statements of Changes in Stockholders' Equity of Dynacor, Inc. 6
for the year ended June 30, 1996, and for the nine months ended
March 31, 1996 and 1997 (unaudited).
Statements of Cash Flows of Dynacor, Inc. for the year ended 7
June 30, 1996, and for the nine months ended March 31, 1996
and 1997 (unaudited).
Notes to Financial Statements. 8
Page 2
Independent Auditor's Report
To the Board of Directors
Dynacor, Inc.
Apple Valley, Minnesota
We have audited the accompanying balance sheet of Dynacor, Inc.
(a Minnesota corporation) as of June 30, 1996 and the related
statements of operations, stockholders' equity and cash flows
for the year ended June 30, 1996. These financial statements
are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audit in accordance with generally accepted
auditing standards. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating
the overall financial statement presentation. We believe that
our audit 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 Dynacor, Inc. as of June 30, 1996, and the results of its
operations and cash flows for the years then ended June 30,
1996, in conformity with generally accepted accounting
principles.
/S/FROEHLING, ANDERSON, PLOWMAN & WASMUTH LTD.
Excelsior, Minnesota
August 28, 1996
Page 3
DYNACOR, INC.
BALANCE SHEETS
<TABLE>
June 30, 1996 March 31, 1997
ASSETS (Unaudited)
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 209,923 $ 168,817
Accounts receivable, net 558,104 513,685
Unbilled receivables 104,811 96,683
Deferred income taxes 23,000 --
Other current assets 55,717 36,453
Total current assets 951,555 815,638
Property and equipment, net 276,517 240,805
Capitalized software development costs, net 910,198 862,782
Other assets 7,664 7,664
$ 2,145,934 $ 1,926,889
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued expenses $ 281,497 $ 396,693
Deferred revenue 574,071 470,303
Advance billings 121,691 351,790
Current portion of long-term debt 120,867 121,042
Total current liabilities 1,098,126 1,339,828
Long-term liabilities 286,341 360,104
Deferred income taxes 45,000 --
Total liabilities 1,429,467 1,699,932
Shareholders' equity:
Common stock, no par value;
10,000,000 shares authorized;
1,295,650 and 1,320,650 shares
issued and outstanding on
June 30, 1996 and March 31, 1997,
respectively. 228,175 284,425
Retained earnings 488,292 (57,468)
Total shareholders' equity 716,467 226,957
$ 2,145,934 $ 1,926,889
</TABLE>
See accompanying notes.
Page 4
DYNACOR, INC.
STATEMENTS OF OPERATIONS
<TABLE>
Year ended Nine months ended
June 30, March 31,
1996 1996 1997
(Unaudited)(Unaudited)
<S> <C> <C> <C>
Operating Revenues:
Computer system equipment
sales and support $ 223,060 $ 94,118 $ 451,841
Application software licenses 1,522,455 796,326 668,435
Software support 1,476,155 542,839 737,504
Services and other 24,667 563,764 452,208
Total operating revenues 3,246,337 1,997,047 2,309,988
Operating Expenses:
Cost of products sold 215,235 69,456 325,050
Client services expense 1,468,765 1,082,846 948,800
Software development costs 708,015 530,275 511,270
Sales and marketing costs 928,215 672,087 755,791
General and administrative expense 311,975 235,200 301,276
Total operating expenses 3,632,205 2,589,864 2,842,187
Income (loss) from operations (385,868) (592,817) (532,199)
Other income (expense):
Interest expense (28,673) (15,207) (33,433)
Miscellaneous 16,582 9,337 6,041
Total other income (expense) (12,091) (5,870) (27,392)
Income (loss) before income taxes (397,959) (598,687) (559,591)
Provision for income taxes (benefit) (143,019) (156,850) (13,831)
Net income (loss) $ (254,940) $ (441,837) $(545,760)
</TABLE>
See accompanying notes.
Page 5
DYNACOR, INC.
STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
FOR THE YEAR ENDED JUNE 30, 1996 AND FOR THE NINE MONTHS ENDED
MARCH 31, 1996 AND 1997 (UNAUDITED)
<TABLE>
Common Stock
Number of Carrying Retained Total
Shares Value Earnings Stockholders'
Equity
<S> <C> <C> <C> <C>
Balance, July 1, 1995 1,245,650 $ 121,925 $ 743,232 $ 865,157
Issuance of common stock -
October 20, 1995 25,000 50,000 -- 50,000
Issuance of common stock -
June 28, 1996 25,000 56,250 -- 56,250
Net loss -- -- (254,940) (254,940)
Balance, June 30, 1996 1,295,650 $ 228,175 $ 488,292 $ 716,467
Balance, July 1, 1995 1,245,650 $ 121,925 $ 743,232 $ 865,157
Issuance of common stock -
October 20, 1995 25,000 50,000 -- 50,000
Net loss -- -- (441,837) (441,837)
Balance, March 31, 1996
(unaudited) 1,270,650 $ 171,925 $ 301,395 $ 473,320
Balance, July 1, 1996 1,295,650 $ 228,175 $ 488,292 $ 716,467
Issuance of common stock -
October 30, 1996 25,000 56,250 -- 56,250
Net loss -- -- (545,760) (545,760)
Balance, March 31, 1997
(unaudited) $ 1,320,650 $ 284,425 $ (57,468) $ 226,957
</TABLE>
See accompanying notes.
Page 6
DYNACOR, INC.
STATEMENTS OF CASH FLOWS
<TABLE>
Year ended Nine months ended
June 30, March 31,
1996 1996 1997
(Unaudited)(Unaudited)
<S> <C> <C> <C>
CASH FLOWS PROVIDED BY OPERATING ACTIVITIES
Net income (loss) $(254,940) $(441,837) $(545,760)
Adjustments to reconcile net income
(loss) to net cash provided
by (used in) operating activities:
Depreciation and amortization 271,790 214,873 247,952
Deferred income taxes (137,200) (159,200) (22,000)
Changes in assets and liabilities:
(Increase) decrease in accounts receivable 201,823 435,082 44,419
(Increase) decrease in unbilled receivables 43,166 (7,600) 8,128
(Increase) decrease in other assets (343) 9,864 19,264
Increase (decrease) in accounts payable and
accrued expenses 50,290 50,774 115,196
Increase (decrease) in deferred revenue 327,468 73,801 (103,768)
Increase (decrease) in advance billings (159,234) 91,176 230,099
NET CASH PROVIDED BY (USED IN) OPERATING
ACTIVITIES 342,820 266,933 (6,470)
CASH FLOWS PROVIDED BY (USED IN) INVESTING ACTIVITIES
Cash surrender value of officer life
insurance 23,792 -- --
Capitalized software expenditures (368,624) (373,600) (158,311)
Acquisition of furniture and equipment (137,649) (128,604) (6,513)
NET CASH (USED IN) INVESTING ACTIVITIES (482,481) (502,204) (164,824)
CASH FLOWS PROVIDED BY (USED IN) FINANCING ACTIVITIES
Net proceeds (repayments) on long-term debt 292,790 (11,139) 73,938
Proceeds from issuance of common stock 106,250 50,000 56,250
Net borrowings (payments) under line of
credit (104,000) 146,717 --
NET CASH PROVIDED BY FINANCING ACTIVITIES 295,040 185,578 130,188
NET INCREASE (DECREASE) IN CASH 155,379 (49,693) (41,106)
CASH - BEGINNING OF YEAR 54,544 54,544 209,923
CASH - END OF YEAR $ 209,923 $ 4,851 $ 168,817
</TABLE>
See accompanying notes.
Page 7
DYNACOR, INC.
Notes to Financial Statements
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Business Activity -
The Company is engaged in the production and sale of software
modules used in hospitals and large clinic laboratories. These
products are sold throughout the United States.
Accounts Receivable -
The Company grants credit to customers located throughout the
United States, substantially all of whom are hospitals or
clinical laboratories. The Company considers accounts
receivable to be fully collectible; accordingly, no allowance
for doubtful accounts is required. If amounts become
uncollectible, they will be charged to operations when that
determination is made. Accounts receivable are not
collateralized.
Inventory -
Inventory is valued at the lower of cost or market, with cost
being determined on the first-in, first-out (FIFO) method.
Inventories consist of computer equipment and supplies.
Property, Equipment and Depreciation -
Property and equipment are carried at cost. Expenditures for
major renewals and betterments, which substantially increase the
useful lives of existing assets, are capitalized. Maintenance
and repairs are charged to operating expenses as incurred.
The Company provides for depreciation of property and equipment
utilizing the straight-line method over estimated useful lives
of the assets. Property and equipment are being depreciated
over periods ranging from 5 to 40 years.
Use of Estimates in Financial Statements -
In preparing financial statements in conformity with generally
accepted accounting principles, management makes estimates and
assumptions that effect the reported amounts of assets and
liabilities and disclosures of contingent assets and liabilities
at the date of the financial statements, as well as the reported
amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.
Due from Customers -
Amounts due from customers represents progress billings on
software projects still in process.
Software Development -
Software coding, production and testing costs are capitalized
and amortized over a period of five years, beginning with the
month of general availability of the product. Research and
design costs are charged to operating expenses as incurred.
Income Taxes -
Income taxes are provided for the tax effects of transactions
reported in the financial statements and consist of taxes
currently due plus deferred taxes related primarily to
differences between the basis of fixed assets and software costs
for financial and income tax reporting. The deferred tax assets
and liabilities represent the future tax consequences of those
differences which will either be taxable or deductible when the
assets and liabilities are recovered or settled.
Page 8
DYNACOR, INC.
Notes to Financial Statements (continued)
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Revenue Recognition -
New Contracts - The Company recognizes revenue from the software
license upon the delivery and acceptance of the software.
Revenue for software services in the contract is recognized
ratably over the production process. The portion of the
contract attributable to warranty is recognized evenly over the
warranty term. Installation and training services are
recognized ratably over the implementation process.
Add-On-Sales - Revenue from software services is recognized upon
completion of the project, unless the price exceeds $20,000, in
which case the revenue is recognized ratably over the production
process. Installation, training and consulting services are
recognized ratably over the implementation process.
Maintenance - Revenue from maintenance (support) contracts is
recognized evenly over the term of the contract.
Equipment and Supplies - Revenue from equipment and supplies is
recognized upon delivery of the product to the customer.
NOTE 2 - LONG-TERM DEBT
As of June 30, 1996, long-term debt consists of the following:
1996
Unsecured note payable to a private investor; due June 1, 1996;
interest is paid quarterly at a rate of 1% above the prime
lending rate of First Bank National Association (9.25% at
June 30,1996). The note was extended with the same terms to
November 1, 1996 $ 75,000
Note payable to a bank in monthly installments of $1,435
including interest at 6.75%; final payment due December, 1997;
secured by property and equipment and inventory. $ 24,439
Unsecured note payable to a private investor group; due
September 1, 1997; interest is paid quarterly at a rate of
1% above the prime lending rate of First Bank National
Association (9.25% at June 30, 1996). $ 75,000
Unsecured note payable to a private investor group; due
September 1, 1998; interest is paid quarterly at a rate
of 1% above the prime lending rate of First Bank National
Association (9.25% at June 30, 1996). $ 87,500
Note payable to an officer in monthly installments of $1,213,
including interest at 9.25%; final payment due September, 2000.
The note is unsecured. $ 48,423
Note payable to an officer in monthly installments of $1,213,
including interest at 9.25%; final payment due September, 2000.
The note is unsecured. $ 48,423
Note payable to an officer in monthly installments of $1,213,
including interest at 9.25%; final payment due September, 2000.
The note is unsecured. $ 48,423
$ 407,208
Less: current portion $ 120,867
Total Long-Term Debt $ 286,341
Page 9
DYNACOR, INC.
Notes to Financial Statements (continued)
NOTE 2 - LONG-TERM DEBT
Current maturities of long-term debt are as follows:
Fiscal year ending June 30, 1997 $120,867
1998 115,868
1999 122,901
2000 38,646
2001 8,926
$407,208
NOTE 3 - LEASES
The Company leases office space under a long-term lease
agreement expiring July 31, 1999. The new lease includes a
renewal option for an additional five years. Per the terms of
the lease, the Company is to pay monthly rental payments of
$5,950 through July 31, 1996; $6,150 from August 1, 1996 through
July 31, 1997; $6,350 from August 1, 1997 through July 31, 1998
and $6,550 from August 1, 1998 through July 31, 1999. The lease
requires the Company to pay insurance, utilities and real estate
taxes.
The Company entered into a lease agreement for computer
equipment on February 1, 1996. The lease expires July 31, 1999.
Per the terms of the lease, the Company is to pay monthly
rental payments of $359.
The Company also leases various computer equipment from IBM.
These leases expire from November, 1996 through August, 2000.
Per the terms of the leases, the Company pays monthly rental
payments of $6,396.
The Company entered into a lease agreement for additional office
space commencing on March 1, 1995 and terminating July 31, 1999.
The lease includes renewal options for an additional five
years. The lease requires the Company to pay monthly rental
payments of $2,680 through July 31, 1996; $2,950 from August 1,
1996 through July 31, 1997; $3,030 from August 1, 1997 through
July 31, 1998 and $3,120 from August 1, 1998 through July 31,
1999 plus insurance, utilities and real estate taxes.
Future, minimum rental commitments for all operating leases, as
of June 30, 1996, are as follows:
Fiscal year ending June 30, 1997 $185,814
1998 173,971
1999 155,925
2000 63,237
2001 125
$578,947
NOTE 4 - 401(K) SALARY SAVINGS AND PROFIT SHARING PLAN
The Company has a 401(k) salary savings and profit sharing plan
which covers all employees, subject to various eligibility
requirements such as months of service and age limitations. The
Company matches 25% of each eligible employee's contribution to
the plan, subject to a maximum of 6% of each employee's gross
annual pay. At the discretion of the Board of Directors, the
Company may make additional contributions based on profits. For
the year ended June 30, 1996, the Company's matching contributions
to the plan, charged against income, were $24,039. The Company
made a discretionary contribution of $43,859 for the year ended
June 30, 1996.
Page 10
DYNACOR, INC.
Notes to Financial Statements (continued)
NOTE 5 - INCOME TAXES
Income tax expense consists of the following:
1996
Current year provision $ 300
Deferred (benefit) (143,319)
$ (143,019)
As of June 30, 1996, the Company has a net operating loss
carryover of $537,838 for state purposes and $532,170 carryover
for federal purposes. These carryovers expire in various years
through 2010.
As of June 30, 1996, the Company has credits resulting from
research activity of $105,580 federal and $40,578 state
available to offset future, federal and state income taxes.
These credits expire in various years through 2011.
NOTE 6 - STOCK OPTIONS
The Company has entered into the following transactions with
respect to stock options to purchase stock:
<TABLE>
Number of Exercise Expiration
Shares Price Date
<S> <C> <C> <C>
Balance-June 30, 1994 135,506 $1.67 to $3.25 Sept. 1996 to Sept. 1997
Exercised October 19, 1994
by private investor (12,500) $1.75 Sept. 1996
Balance-June 30, 1995 123,006 $1.67 to $3.25 Sept. 1996 to Sept. 1997
Exercised October 30, 1995
by private investor (25,000) $2.00 Sept. 1996
Exercised June 28, 1996 by
private investment group (25,000) $2.25 Sept. 1997
Issued June 26, 1996 to
private investment group 86,250 $5.00 to $6.00 Sept. 1998 to Sept. 1999
Issued June 28, 1996 to
current employees of
Dynacor, Inc. (Note 8) 40,000 $3.20 to $3.52 June 2001
Balance-June 30, 1996 199,256 $1.67 to $3.52 Sept. 1997 to June 2001
</TABLE>
NOTE 7 - BUY/SELL AGREEMENT
The Company, along with its principal stockholders, has entered
into buy/sell agreements to purchase the Company's stock if the
stockholders desire to sell their stock or upon the death of the
principal stockholders. These agreements are partially funded
by insurance. The agreed upon price for which the Company can
repurchase shares varies from $1.00 to $3.00 per share.
NOTE 8 - STOCK INCENTIVE PLAN
During the year ended June 30, 1996, the Company created a stock
incentive plan. Under the plan, all full- and part-time
employees of the Company may be granted options to purchase
Company stock. The options are granted based on the Board of
Directors.
Page 11
DYNACOR, INC.
Notes to Unaudited Condensed Financial Statements
Nine Months Ended March 31, 1996 and 1997
1. Unaudited Financial Statements
The accompanying unaudited Condensed Balance Sheet as of March
31, 1997, and Condensed Statements of Operations, Changes in
Stockholders' Equity and of Cash Flows for the nine month
periods ended March 31, 1996 and 1997, have been prepared by
management in conformity with generally accepted accounting
principles for interim financial statements in accordance with
Regulation S-X. Accordingly, they do not include all the
disclosures required by generally accepted accounting principles
for complete financial statements. All adjustments and accruals
considered necessary for fair presentation of financial
information have been included in the opinion of management.
All adjustments made were of a normal recurring nature.
Operating results for the nine month period ended March 31,
1997, are not necessarily indicative of the operating results
which may be expected for the year ending June 30, 1997.
2. Subsequent Events
On May 22, 1997, Dynacor, Inc. ("Dynacor"), was merged into
Dynamic Healthcare Technologies, Inc. ("Dynamic"). The
shareholders of Dynacor received 250,000 common shares of
Dynamic, in exchange for all of the outstanding shares of
Dynacor's common stock.
Page 12
FORM 8-K
DYNAMIC HEALTHCARE TECHNOLOGIES, INC.
MAY 22, 1997
(b) Pro Forma Financial Information
On May 22, 1997, the Registrant issued 250,000 shares of common
stock ($.01 par value), to the shareholders of Dynacor, Inc.
("Dynacor"), in exchange for all of the outstanding common stock
(no par value), of Dynacor. The acquisition has been accounted
for using the pooling of interests method.
Pro Forma Condensed Combined Balance Sheet
The following unaudited pro forma condensed combined balance
sheet as of March 31, 1997 has been prepared based upon certain
pro forma adjustments to the March 31, 1997 balance sheet of
Dynamic Healthcare Technologies, Inc. (the "Company"), as
described below, including giving effect to the merger of
Dynacor into the Company as if the transaction had occurred on
January 1, 1997. The pro forma condensed combined balance sheet
should be read in conjunction with the notes thereto and the
historical financial statements of the Company previously filed
on Form 10-Q for the period ending March 31, 1997, and of
Dynacor included elsewhere in this Form 8-K.
Page 13
<TABLE>
Company Dynacor
As As
Reported Reported Pro Forma
March 31, March 31, Pro Forma March 31,
1997 1997 Adjustments References 1997
<S> <C> <C> <C> <C> <C>
Assets
Current assets:
Cash and equivalents $10,760,706 $ 168,817 $10,929,523
Accounts receivable, net 4,206,732 513,685 4,720,417
Unbilled receivables 2,039,284 96,683 2,135,967
Contract receivables
current 1,210,679 -- 1,210,679
Other 794,919 36,453 831,372
Total current assets 19,012,320 815,638 19,827,958
Fixed assets, net 2,884,502 240,805 3,125,307
Capitalized software, net 4,952,008 862,782 5,814,790
Goodwill, net 2,376,184 -- 2,376,184
Contract receivables
non current 1,197,771 -- 1,197,771
Other 68,175 7,664 75,839
$ 30,490,960 $1,926,889 $32,417,849
Liabilities & Equity
Current liabilities:
Accounts payable &
accrued expenses $ 1,817,483 $ 396,693 $ 2,214,176
Deferred revenue 3,896,556 470,303 4,366,859
Advance billings 1,404,459 351,790 1,756,249
Notes payable
current maturities -- 121,042 121,042
Other 363,392 -- 363,392
Total current liabilities 7,481,890 1,339,828 8,821,718
Notes payable -- 360,104 360,104
Other liabilities 177,198 -- 177,198
7,659,088 1,699,932 9,359,020
Stockholders' equity:
Series CM preferred stock 60 -- 60
Common stock 170,649 284,425 (281,925) (1) 173,149
Additional paid-in
capital 43,729,893 -- 281,925 (1) 44,011,818
Retained earnings/
(deficit) (21,068,730) (57,468) (21,126,198)
Total shareholders'
equity 22,831,872 226,957 23,058,829
$ 30,490,960 $ 1,926,889 $ 32,417,849
</TABLE>
See accompanying notes.
Notes to Unaudited Pro Forma Condensed Combined Balance Sheet
The unaudited pro forma condensed combined balance sheet gives
effect to the following pro forma adjustments:
(1) Reflects the issuance of 250,000 shares of the Registrants
common stock $0.01 par value, in exchange for all of the
outstanding common stock of Dynacor, Inc.
Page 14
Pro Forma Condensed Consolidated Statements of Operations
The following unaudited pro forma condensed consolidated
statements of operations have been prepared based upon certain
pro forma adjustments to the historical financial statements of
Dynamic Healthcare Technologies, Inc., and of Dynacor, Inc.
The pro forma condensed consolidated statements of operations
for the year ended December 31, 1996 and for the three months
ended March 31, 1997 give effect to the acquisition of Dynacor
as if the transaction had occurred on January 1, 1996. The
material nonrecurring write off of in process research and
development of $15,057,569 related to the Collaborative Medical
Systems, Inc. acquisition in 1996 and the estimated $100,000 of
accrued acquisition related costs related to the Dynacor
acquisition are not considered in the pro forma condensed
consolidated statements of operation.
<TABLE>
Year Ended December 31, 1996
Company Pro Forma
As Dynacor Pro Forma
Reported Acquisition Adjustments Ref. Pro Forma
<S> <C> <C> <C> <C> <S>
Operating revenues:
Computer system
equipment sales $ 3,629,396 $ 342,153 -- $ 3,971,549
Application software
licenses 5,098,538 1,376,136 -- 6,474,674
Software support 5,204,992 899,941 -- 6,104,933
Services & other 2,637,282 637,842 -- 3,275,124
Total operating
revenue 16,570,208 3,256,072 -- 19,826,280
Operating expenses:
Cost of products sold 3,280,558 286,050 -- 3,566,608
Client services
expenses 5,154,367 1,376,320 -- 6,530,687
Software development
cost 2,354,578 720,150 -- 3,074,728
Sales & marketing 3,706,176 951,894 -- 4,658,070
General & admin.expense 2,217,987 359,789 -- 2,577,776
Total operating
expenses 16,713,666 3,694,203 -- 20,407,869
Income (loss) from
operations (143,458) (438,131) -- (581,589)
Other income (expense) 49,985 (28,899) -- 21,086
Income (loss) before taxes (93,473) (467,030) -- (560,503)
Provision for income taxes
(benefit) -- (159,200) 159,200 (1) --
Net earnings (loss) $ (93,473) $(307,830) $(159,200) (560,503)
Net earnings (loss)
available for common
shareholders $ (344,510) -- -- $ (811,540)
Net earning (loss) per
common share $ (0.04) -- -- $ (0.09)
Weighted average number
of common and common
equivalent shares
outstanding 8,974,775 -- 250,000 9,224,775
</TABLE>
See accompanying notes.
Page 15
<TABLE>
Three Months Ended March 31, 1997
Company Pro Forma
As Dynacor Pro Forma
Reported Acquisition Adjustments Reference Pro Forma
<S> <C> <C> <C> <C> <C>
Operating revenues:
Computer system
equipment sales $ 464,155 $ 281,945 -- $ 746,100
Application software
licenses 5,128,138 381,602 -- 5,509,740
Software support 2,313,381 245,730 -- 2,559,111
Services & other 1,764,485 168,600 -- 1,933,085
Total operating
revenue 9,670,159 1,077,877 -- 10,748,036
Operating expenses:
Cost of equipment
sold 577,343 214,395 -- 791,738
Client services
expenses 2,413,833 351,040 -- 2,764,873
Software
development cost 1,192,119 166,222 -- 1,358,341
Sales & marketing 1,449,371 295,559 -- 1,744,930
General & admin.
expense 1,184,631 99,385 -- 1,284,016
Total operating
expenses 6,817,297 1,126,601 -- 7,943,898
Operating income
(loss) 2,852,862 (48,724) -- 2,804,138
Other income
(expense) 179,381 (8,763) -- 170,618
Income (loss)
before taxes 3,032,243 (57,487) -- 2,974,756
Provision for income
taxes -- -- -- --
Net earnings (loss) $3,032,243 $ (57,487) -- $ 2,974,756
Net earnings (loss)
available for common
shareholders $3,032,243 -- -- $ 2,974,756
Net earnings (loss)
per common share $ 0.17 -- -- $ 0.17
Weighted average
number of common
and common
equivalent shares
outstanding 17,637,238 -- 250,000 17,887,238
</TABLE>
See accompanying notes.
Notes to Unaudited Pro Forma Condensed Consolidated Statements of Operations.
The unaudited pro forma condensed consolidated statements of opertaions gives
effect to the following pro forma adjustments:
(1) Reflects the elimination of the income tax benefit previously
recognized by Dynacor, Inc.
Page 16
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
DYNAMIC HEALTHCARE TECHNOLOGIES, INC.
(Registrant)
Date: July 16, 1997 /S/MITCHEL J. LASKEY
Mitchel J. Laskey
President, CEO
Date: July 16, 1997 /S/PAUL S. GLOVER
Paul S. Glover
Vice President of Finance, CFO
Page 17
FORM 8-K
DYNAMIC HEALTHCARE TECHNOLOGIES, INC.
Index to Exhibits
Description of Exhibits: Page Number
Exhibit 23: Consent of Independent Certified Public Accountant 19
Page 18
INDEPENDENT AUDITORS CONSENT
As independent public accountants, we consent to the use of our report
on Dynacor, Inc. dated August 28, 1996 and to all references to our firm
included in or made a part of the Form 8-K of Dynamic Healthcare Technologies,
Inc.
/S/FROEHLING, ANDERSON, PLOWMAN & WASMUTH LTD.
Minnetonka, Minnesota
July 16, 1997
Page 19
