<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K/A
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) May 4, 2000
MIRACOR DIAGNOSTICS, INC.
(Exact name of registrant as specified in its charter)
Utah 0-12365 58-1475517
-------------------------------------------------------------------
(State or other (Commission (IRS Employer
jurisdiction of File Number) Identification No.)
formation)
9191 Towne Center Drive, Suite 420, San Diego, California 92122
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (858) 455-7127
MEDICAL DEVICE TECHNOLOGIES, INC.
(Former name or former address, if changed since last report)
<PAGE>
FORM 8-KA
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Act of 1934
Item 1. Changes in Control of Registrant
--------------------------------
Not Applicable
Item 2. Acquisition or Disposition of Assets
------------------------------------
On February 9, 2000, we completed the acquisition of 80% of
Ultra Open MRI Holding Corp., a Florida corporation which owns three operations
in Tampa, St. Petersburg, and Palm Harbor, Florida. We acquired this 80%
interest in exchange for a total of approximately 2,534,400 of our restricted
common shares at a price of $.60 per share, which represented 2.56 times the
twelve month trailing EBITDA (EBITDA is comprised of revenues less all operating
expenses, net of depreciation, amortization, taxes and interest) of MRI
Services, LC and an affiliate company, the predecessors of Ultra Open MRI
Holding Corp., measured as of December 31, 1999, and based upon generally
accepted accounting principles (GAAP). In addition, we have purchased a
non-competition agreement from the former principals of Ultra Open MRI Holding
Corp. for 0.32 times the twelve month trailing EBITDA of MRI Services, LC,
measured as of December 31, 1999. We gave a series of promissory notes, due in
six months, nine months, and twenty-one months, respectively, to these former
principals totaling $380,160. The former principals of Ultra Open MRI Holding
Corp., who have signed non-competition agreements with us, will remain with this
company under three year employment contracts and continue to own twenty percent
of Ultra Open MRI Holding Corp.
Item 3. Bankruptcy or Receivership
--------------------------
Not Applicable
Item 4. Changes in Registrant's Certifying Accountant
---------------------------------------------
Not Applicable
Item 5. Other Events
------------
Not Applicable.
Item 6. Resignation of Registrant's Directors
-------------------------------------
Not Applicable
Item 7. Financial Statements, Pro Forma Financial Information and
---------------------------------------------------------
Exhibits
--------
a. Audited Financial Statements for year ended December 31,
1999
b. Pro forma Financial Information
Item 8. Change of Fiscal Year
---------------------
Not Applicable
2
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Item 9. Sales of Equity Securities Pursuant to Regulation S
---------------------------------------------------
Not Applicable
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, the Registrant has duly authorized and caused the undersigned to sign
this Report on the Registrant's behalf.
MIRACOR DIAGNOSTICS, INC.
By: /s/ M. Lee Hulsebus
----------------------------------------
M. Lee Hulsebus, Chief Executive Officer
Dated: May 4, 2000
3
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PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
AS OF DECEMBER 31, 1999
Current assets:
Cash and cash equivalents $ 106,517
Accounts receivable, net 3,465,652
Other 85,452
---------------
Total current assets 3,657,621
Property and equipment 5,630,838
Less accumulated depreciation (2,343,181)
---------------
Property and equipment, net 3,287,657
Intangible and other assets 6,661,078
Less accumulated amortization (373,066)
---------------
Intangible and other assets, net 6,288,012
---------------
Total Assets $ 13,233,290
===============
Current liabilities
Accounts payable $933,465
Accrued expenses 491,470
Line of credit 579,784
Notes payable - current 1,263,747
Capital lease obligations - current 948,692
---------------
Total current liabilities 4,217,158
Notes payable - long-term 895,617
Capital lease obligations - long-term 3,413,944
---------------
Total long-term liabilities 4,309,561
Minority Interest 116,127
Equity 4,590,444
---------------
Total Liabilities and Equity $ 13,233,290
===============
PRO FORMA CONDENSED CONSOLIDATED INCOME STATEMENT
FOR THE YEAR ENDED DECEMBER 31, 1999
TOTAL
Net revenue $ 5,830,697
Sales, general and administrative expenses (6,478,876)
---------------
Loss from operations (648,179)
Other expense (372,103)
Minority interest 19,649
---------------
Net Loss $ (1,000,633)
===============
The pro forma condensed consolidated financial statements as of December 31,
1999 and for the year then ended include the accounts of Miracor Diagnostics,
Inc. and MRI Services, L.C. as if the acquisition had taken place on January 1,
1999.
The financial statements were adjusted as of January 1, 1999 giving effect to
the amortization of goodwill which originated in the acquisition.
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MRI SERVICES, L.C. D/B/A
ULTRA MRI & DIAGNOSTIC SERVICES, L.C.
FINANCIAL STATEMENTS
YEAR ENDED DECEMBER 31, 1999
<PAGE>
MRI SERVICES, L.C. D/B/A
ULTRA MRI & DIAGNOSTIC SERVICES, L.C.
TABLE OF CONTENTS
Page
----
INDEPENDENT AUDITORS' REPORT 1
FINANCIAL STATEMENTS:
Balance sheet 2-3
Statement of operations 4
Statement of members' capital 5
Statement of cash flow 6-7
NOTES TO FINANCIAL STATEMENTS 8-14
<PAGE>
INDEPENDENT AUDITOR'S REPORT
Board of Directors
MRI Services, L.C. d/b/a
Ultra MRI & Diagnostic Services, L.C.
Tampa, Florida
We have audited the accompanying balance sheet of MRI Services, L.C. d/b/a Ultra
MRI & Diagnostic Services, L.C. as of December 31, 1999, and the related
statements of operations, members' capital and cash flows for the year then
ended. These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on the financial
statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of MRI Services, L.C. d/b/a Ultra
MRI & Diagnostic Services, L.C. as of December 31, 1999, and the results of its
operations, members' capital and cash flows for the year then ended, in
conformity with generally accepted accounting principles.
/s/ Chastang, Ferrell, Sims & Eiserman, P.A.
March 30, 2000
Winter Park, Florida
1
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MRI SERVICES, L.C. D/B/A
ULTRA MRI & DIAGNOSTIC SERVICES, L.C.
YEAR ENDED DECEMBER 31, 1999
ASSETS
Current assets:
Accounts receivable, net of allowance
of $348,919 (notes 2 and 5) $ 742,346
Other receivables 3,628
--------------
Total current assets 745,974
--------------
Property and equipment (note 2):
Magnetic resonance imagers (note 4) 1,390,147
Computers and equipment 13,807
Furniture and fixtures 4,066
Leasehold improvements 105,904
Vehicles 46,319
--------------
1,560,243
Less: accumulated depreciation (476,872)
--------------
Net property and equipment 1,083,371
--------------
Other assets:
Deposits (note 2) 67,765
Prepaid expenses 7,059
--------------
Total other assets 74,824
--------------
Total assets $ 1,904,169
==============
The accompanying notes are an integral part of
these financial statements.
2
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MRI SERVICES, L.C. D/B/A
ULTRA MRI & DIAGNOSTIC SERVICES, L.C.
BALANCE SHEET
DECEMBER 31, 1999
LIABILITIES AND MEMBERS' CAPITAL
Current liabilities:
Cash overdraft (note 2) $ 10,186
Accounts payable and accrued expenses 73,719
Lines of credit (notes 2 and 4) 73,400
Notes payable (notes 2 and 4) 74,635
Obligations under capital leases (note 4) 279,385
--------------
Total current liabilities 511,325
--------------
Long-term liabilities (notes 2 and 4):
Obligations under capital leases 730,409
Notes payable 81,801
--------------
Total long-term liabilities 812,210
--------------
Commitments and contingencies
(notes 3 and 4) -
Members' capital 580,634
--------------
Total liabilities and members' capital $ 1,904,169
==============
The accompanying notes are an integral part of
these financial statements.
3
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MRI SERVICES, L.C. D/B/A
ULTRA MRI & DIAGNOSTIC SERVICES, L.C.
STATEMENT OF OPERATIONS
YEAR ENDED DECEMBER 31, 1999
Revenue:
Professional fees, net of billing adjustments (note 2) $ 1,905,710
--------------
Operating expenses:
Personnel costs 399,530
Depreciation and amortization (note 2) 204,763
Reading fees 178,177
Professional fees 99,102
Maintenance and repairs 84,359
Office rent (note 3) 77,928
M.R.I. supplies and film 53,128
Office expense 51,661
Insurance 50,988
Marketing 48,830
Utilities 45,351
Telephone 40,430
Travel and entertainment 37,801
Temporary services 36,294
Taxes 15,464
Equipment leases 13,629
Automobiles 11,348
Postage 8,691
Miscellaneous expenses 5,644
Licenses and fees 2,543
--------------
Total operating expenses 1,465,661
--------------
Other income (expense):
Interest expense (note 4) (125,682)
Gain on sale of asset 15,992
Other income 10,123
--------------
Total other income (expense) (99,567)
--------------
Net income $ 340,482
==============
The accompanying notes are an integral part of
these financial statements.
4
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MRI SERVICES, L.C. D/B/A
ULTRA MRI & DIAGNOSTIC SERVICES, L.C.
STATEMENT OF MEMBERS' CAPITAL
YEAR ENDED DECEMBER 31, 1999
Balance, December 31, 1998 $ 279,586
Repurchase of members' capital (5,000)
Members' distributions (34,434)
Net income 340,482
--------------
Balance, December 31, 1999 $ 580,634
==============
The accompanying notes are an integral part of
these financial statements.
5
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MRI SERVICES, L.C. D/B/A
ULTRA MRI & DIAGNOSTIC SERVICES, L.C.
STATEMENT OF CASH FLOWS
YEAR ENDED DECEMBER 31, 1999
Cash flows from operating activities:
Net income $ 340,482
Adjustments to reconcile net income to net
cash used in operating activities:
Depreciation and amortization 204,763
(Increase) decrease in assets:
Accounts receivable (357,641)
Other receivables (1,210)
Prepaid expenses 1,310
Deposits (34,285)
Increase (decrease) in liabilities:
Accounts payable and accrued expenses 36,891
Payable to stockholders (6,076)
--------------
Net cash provided by operating activities 184,234
--------------
Cash flows from investing activities:
Acquisition of property and equipment (85,417)
--------------
Cash flows from financing activities:
Proceeds from notes payable 57,500
Principal payments on notes payable (71,297)
Net proceeds from lines of credit 23,400
Payments on obligations under capital leases (222,983)
Proceeds from capital lease obligations 120,000
Repurchase of members' capital (5,000)
Members' distributions (34,434)
--------------
Net cash used in financing activities (132,814)
--------------
The accompanying notes are an integral part of
these financial statements.
6
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MRI SERVICES, L.C. D/B/A
ULTRA MRI & DIAGNOSTIC SERVICES, L.C.
STATEMENT OF CASH FLOWS (CONTINUED)
YEAR ENDED DECEMBER 31, 1999
Net decrease in cash and cash equivalents $ (33,997)
Cash and cash equivalents, beginning of year 23,811
--------------
Cash overdraft, end of year $ (10,186)
==============
Supplemental disclosures of cash flow information:
Income taxes paid were $0 in
1999. Interest paid was $125,682 in 1999.
Supplemental disclosures of non-cash investing and financing activities:
Capital lease obligations of $289,000 were incurred for equipment
under lease agreements in 1999.
The accompanying notes are an integral part of
these financial statements.
7
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MRI SERVICES, L.C. D/B/A
ULTRA MRI & DIAGNOSTIC SERVICES, L.C.
YEAR ENDED DECEMBER 31, 1999
NOTE 1 - ORGANIZATION:
MRI Services, L.C. d/b/a Ultra MRI Diagnostic Services, L.C. (the "Company") is
a Florida Limited Liability Company and was incorporated in May 1996. The
Company has three offices located in Tampa, St. Petersburg and Palm Harbor,
Florida and provides scanning and reading services to the medical industry using
a magnetic resonance imaging machine ("MRI").
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
Cash and cash equivalents
- -------------------------
For purposes of the statement of cash flows, the Company considers all highly
liquid debt instruments purchased with a maturity of three months or less to be
cash equivalents.
Basis of accounting
- -------------------
The accompanying financial statements are prepared on the accrual basis of
accounting in conformity with generally accepted accounting principles.
Accounts receivable
- -------------------
Accounts receivable are recorded at net realizable value and have been reduced
for known and estimated billing adjustments.
Fair values of financial instruments
- ------------------------------------
The following methods and assumptions were used by the Company in estimating its
fair value disclosures for financial instruments:
Cash and equivalents - The carrying amount approximates fair value because
of the short period to maturity of the instruments.
Short-term borrowings - The carrying amount approximates fair value since
the interest rate fluctuates with the lending banks' prime rate or matures
in the near future using current prevailing rates for similar borrowings.
Long-term debt, including capital leases - The fair value of long-term
debt, including capital leases, is estimated based on interest rates for
the same or similar debt offered to the Company having the same or similar
remaining maturities and collateral requirements.
8
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MRI SERVICES, L.C. D/B/A
ULTRA MRI & DIAGNOSTIC SERVICES, L.C.
YEAR ENDED DECEMBER 31, 1999
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED):
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.
Property and equipment
- ----------------------
Property and equipment is recorded at cost. Depreciation has been provided in
the financial statements on the straight-line method at rates based on
reasonable estimates of useful lives, which fall within the following ranges for
major asset classifications:
Magnetic resonance imagers 5-7 years
Computers and equipment 5-7 years
Furniture and fixtures 7 years
Leasehold improvements 7 years
Vehicles 7 years
Maintenance, repairs and minor renewals are charged to earnings in the year in
which the expense is incurred. Additions, improvements and major renewals are
capitalized.
The costs of assets retired or sold, together with the related accumulated
depreciation, are removed from the accounts, and any profit or loss on
disposition is credited or charged to earnings.
Deposits
- --------
Deposits represent the prepayment of the last month's installment payment under
capital leases (see note 4) and office facility deposits.
Capital leases
- --------------
Included in property and equipment on the balance sheet is $1,177,936 in MRI
machines held under capital leases.
Included in property and equipment on the balance sheet is $115,260 in other
medical equipment held under capital leases.
Included in property and equipment on the balance sheet are $84,600 in leasehold
improvements which are financed under capital leases.
9
<PAGE>
MRI SERVICES, L.C. D/B/A
ULTRA MRI & DIAGNOSTIC SERVICES, L.C.
YEAR ENDED DECEMBER 31, 1999
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED):
Income taxes
- ------------
The Company is a Florida limited liability company under the Internal Revenue
Code. In lieu of corporation income taxes, the members of a limited liability
company are taxed on their proportionate share of the entity's taxable income.
Therefore, no provision or liability for Federal or state income taxes has been
included in the financial statements.
NOTE 3 - COMMITMENTS:
In October 1997 the Company signed an office lease agreement for office space in
St. Petersburg, Florida for the period from October 1997 through February 2000.
The lease required monthly rental payments of $1,808, including sales tax
through February 1999. Beginning March 1999 the required monthly rental payments
increased to $1,944, including sales tax. Rent expense was $23,592 for the year
ended December 31, 1999.
In June 1998 the Company signed an office lease agreement for office space in
Palm Harbor, Florida for the one-year period June 1998 through May 1999. The
lease required monthly rental payments of $1,739, including sales tax and their
pro-rata share of common area maintenance charges. The Company has an option to
renew this lease for six 1-year periods. In June 1999 the Company exercised
their first renewal option. This option required monthly rental payments of
$1,820, including sales tax and their pro-rata share of common area maintenance
charges, through September 1999. Beginning October 1999, the required monthly
rental payments decreased to $895, including sales tax and their pro-rata share
of common area maintenance charges. Rent expense was $19,193 for the year ended
December 31, 1999.
In July 1998 the Company signed an office lease agreement for office space in
Tampa, Florida for the two-year period July 1998 through July 2000. This lease
required monthly rental payments of $2,140, including sales tax, through March
1999. Beginning April 1999, this lease required monthly rental payments of
$2,500, including sales tax. Rent expense was $29,455 for the year ended
December 31, 1999. The Company has an option to renew this lease for six 1-year
periods.
In October 1999 the Company signed an office lease agreement for office space in
St. Petersburg, Florida for the two-year period November 1999 through October
2001. This lease requires monthly rental payments of $2,844, including sales tax
and their pro-rata share of common area maintenance charges. Rent expense was
$5,688 for the year ended December 31, 1999. The Company has an option to renew
this lease for four 1-year periods.
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MRI SERVICES, L.C. D/B/A
ULTRA MRI & DIAGNOSTIC SERVICES, L.C.
YEAR ENDED DECEMBER 31, 1999
NOTE 3 - COMMITMENTS (CONTINUED):
Subsequent to December 31, 1999, the Company signed an office lease agreement
for additional office space in St. Petersburg, Florida for the period January
2000 through November 2001. The lease requires monthly rental payments of
$2,480, including sales tax and their pro-rata share of common area maintenance
charges. The Company has an option to renew this lease for five 1-year periods.
Future minimum rental payments required under these noncancellable operating
leases as of December 31, 1999 are as follows:
Year
------------------
2000 $ 85,276
2001 55,720
--------------
$ 140,996
==============
NOTE 4 - INDEBTEDNESS:
Notes payable
- -------------
At December 31, 1999, notes payable are as follows:
Promissory note, due in monthly installments of $1,819,
which includes interest at 8.50%, matures June 2002,
collateralized by equipment. $ 47,464
Promissory note, due in monthly installments of $1,429,
which includes interest at 8.00%, matures December 2001,
collateralized by equipment. 31,600
Promissory note, due in monthly installments of $1,249,
which includes interest at 13.90%, matures May 2002,
collateralized by equipment. 26,158
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MRI SERVICES, L.C. D/B/A
ULTRA MRI & DIAGNOSTIC SERVICES, L.C.
YEAR ENDED DECEMBER 31, 1999
NOTE 4 - INDEBTEDNESS (CONTINUED):
Promissory note, due in monthly installments of $1,629,
which includes interest at prime plus 2%, matures May 2001,
collateralized by accounts receivable and equipment. $ 24,399
Promissory note, due in monthly installments of $796,
which includes interest at 12.25%, matures December 2001,
collateralized by equipment and is personally guaranteed by
the two members of the Company. 16,849
Promissory note, due in monthly installments of $372,
which includes interest at 10.00%, matures October 2001,
collateralized by equipment. 7,488
Promissory note, due in monthly installments of $834,
which includes interest at 11.65%, matures March 2000,
collateralized by accounts receivable and equipment and is
personally guaranteed by the two members of the Company. 2,478
--------------
Total 156,436
Less: current maturities (74,635)
--------------
Long-term portion $ 81,801
==============
Aggregate principal maturities required on notes payable at December 31, 1999,
are as follows:
Year Amount
------------------ --------------
2000 $ 74,635
2001 68,327
2002 13,474
--------------
$ 156,436
==============
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MRI SERVICES, L.C. D/B/A
ULTRA MRI & DIAGNOSTIC SERVICES, L.C.
YEAR ENDED DECEMBER 31, 1999
NOTE 4 - INDEBTEDNESS (CONTINUED):
Lines of credit
- ---------------
At December 31, 1999, the Company had a $50,000 line of credit with the Bank of
America and a $25,000 line of credit with AmSouth Bank. Interest was payable
monthly at prime plus 1.75% and 10.50%, respectively. These lines of credit are
both due on demand and are collateralized by accounts receivable, equipment and
general intangibles of the Company. At December 31, 1999, $50,000 and $23,400,
respectively, were outstanding under these lines of credit.
Obligations under capital leases
- --------------------------------
The Company has entered into three capital lease agreements for MRI machines,
two capital lease agreements for laser imagers and one capital lease for the
financing of other property and equipment. The leases are for terms of up to
sixty months and have been capitalized using interest rates ranging from 7.70%
to 18.78%.
Future minimum lease payments on the above capital leases are as follows at
December 31, 1999:
2000 $ 357,120
2001 318,003
2002 373,691
2003 88,200
2004 44,100
--------------
Total minimum lease payments 1,181,114
Less: amount representing interest (171,320)
--------------
Total obligations under capital leases 1,009,794
Less: current portion of lease obligations (279,385)
--------------
Long-term portion of lease obligations $ 730,409
==============
Interest expense related to these capital leases was $89,665 for the year ended
December 31, 1999.
These MRI leases are collateralized by the MRI machines and personal guarantees
of the two members of the Company.
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MRI SERVICES, L.C. D/B/A
ULTRA MRI & DIAGNOSTIC SERVICES, L.C.
YEAR ENDED DECEMBER 31, 1999
NOTE 4 - INDEBTEDNESS (CONTINUED):
Subsequent to December 31, 1999, the Company entered into a capital lease
agreement to refinance an existing MRI machine. The lease term is twenty-four
months and has been capitalized using an interest rate of 17.44%.
Additional future minimum lease payments on the above capital lease entered into
subsequent to December 31, 1999, are as follows:
2000 $ 18,300
2001 59,586
2002 14,896
--------------
$ 92,782
==============
NOTE 5 - CONCENTRATION OF CREDIT RISK:
The Company operates and grants credit to customers in Central Florida. In
addition, the Company files claims with numerous insurance carriers, managed
care groups and Medicare and Medicaid located throughout the United States.
Financial instruments subject to credit risk include accounts receivable.
Consequently, the Company's ability to collect the amounts due from customers,
managed care groups, insurance companies and government agencies may be affected
by economic fluctuation and governmental regulations in the healthcare industry.
NOTE 6 - SALE OF COMPANY:
In February 2000, the majority of the assets and liabilities of the Company were
distributed to the members of the Company. These assets and liabilities were
contributed to another entity, whose parent company merged with a subsidiary of
a publicly held entity, Miracor Diagnostics, Inc.
14
