Registration No. 333-
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
UCI MEDICAL AFFILIATES, INC.
(Exact Name of Registrant as Specified in Its Charter)
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Delaware 59-2225346
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
Jerry F. Wells, Jr.
Chief Financial Officer
1901 Main Street, Suite 1200 1901 Main Street, Suite 1200
Columbia, South Carolina 29201 Columbia, South Carolina 29201
(803) 252-3661 (803) 252-3661
(Address, Including Zip Code, and Telephone Number, (Name, Address, Including Zip Code, and Telephone Number,
Including Area Code, of Registrant's Principal Executive Offices) Including Area Code, of Agent for Service)
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Copy To:
William S. McMaster
Nexsen Pruet Jacobs & Pollard, LLP
1441 Main Street, Suite 1500
Columbia, South Carolina 29201
Approximate date of commencement of proposed sale to the public: As
soon as practicable after the effective date of this Registration Statement.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]
If any of the securities being registered on this Form are to be
offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933, other than securities offered only in connection with
dividend or interest reinvestment plans, check the following box. [ X ]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration statement number of earlier effective
registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule
462(c) under the Securities Act, check the following box and list the Securities
Act registration statement number of the earlier effective registration
statement for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule
434, please check the following box.[ ]
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CALCULATION OF REGISTRATION FEE
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Amount to Proposed Maximum Proposed Maximum Amount of
Title of Each Class of Securities be Offering Price Per Aggregate Offering Registration
to be Registered Registered Unit (1) Price (1) Fee
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Common Stock 1,200,000 $1.53 $1,836,000 $542
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(1) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(c) under the Securities Act of 1933, based on the
average of the high and low prices of the Registrant's Common Stock
reported on the Nasdaq SmallCap Market on June 10, 1998.
The Registrant hereby amends this Registration Statement on such date
or dates as may be necessary to delay its effective date until the Registrant
shall file a further amendment which specifically states that this Registration
Statement shall thereafter become effective in accordance with section 8(a) of
the Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
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1,200,000 Shares
UCI MEDICAL AFFILIATES, INC.
Common Stock
This Prospectus relates to the public offering that may be made from
time to time of up to 1,200,000 shares (the "Shares") of common stock, $0.05 par
value per share (the "Common Stock"), of UCI Medical Affiliates, Inc., a
Delaware corporation (the "Company"), by, or for the accounts of, the holders
thereof (collectively, the "Selling Shareholders"). See "Selling Shareholders."
The Shares were issued by the Company on May 12, 1998 to two investors
in a transaction exempt from the registration requirements of the Securities Act
of 1933, as amended (the "1933 Act") and applicable state securities laws.
The Selling Shareholders have advised the Company that they intend to
sell the Shares offered hereby from time to time in the over-the-counter market,
including ordinary broker's transactions, in privately negotiated transactions,
or through sales to one or more dealers for resale of such Shares. Such sales
may be made at prevailing market prices at the time of sale, at prices related
to such prevailing market prices, or at negotiated prices satisfactory to the
Selling Shareholders, or in any combination thereof. Until such time as the
Shares are eligible for public sale by the Selling Shareholders under Rule 144
under the 1933 Act, the Registration Statement of which this Prospectus forms
a part must be current at the time any Selling Shareholder makes any public
sale of Shares. See "Plan of Distribution."
The Common Stock is traded on the Nasdaq SmallCap Market under the
symbol "UCIA." On June 10, 1998, the last sale price of the Common Stock as
reported on the Nasdaq SmallCap Market was $1.50 per share.
The Company will not receive any of the proceeds from the sale of the
Shares by the Selling Shareholders. By agreement with the Selling Shareholders,
the Company has agreed to pay all of the expenses of registering the Shares
offered hereby (other than any underwriter or selling agent's discounts and
commissions and fees and costs of legal counsel or other advisors to the Selling
Shareholders). See "Selling Shareholders."
THESE SECURITIES INVOLVE A HIGH DEGREE OF RISK.
SEE "RISK FACTORS" ON PAGES 4 THROUGH 9.
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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION
OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS.
ANY REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.
The date of this Prospectus is June , 1998.
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AVAILABLE INFORMATION
The Company has filed with the Securities and Exchange Commission (the
"Commission") a Registration Statement (the "Registration Statement," which term
shall include all amendments thereto) under the 1933 Act with respect to the
securities offered hereby. This Prospectus, filed as part of that Registration
Statement, does not contain all of the information set forth in the Registration
Statement and the exhibits thereto, certain portions having been omitted from
this Prospectus in accordance with the rules and regulations of the Commission.
For further information with respect to the Company, the securities offered by
this Prospectus and such omitted information, reference is made to the
Registration Statement, including any and all exhibits and amendments thereto,
which Registration Statement may be inspected and copied in the manner and at
the sources described below. Statements contained in this Prospectus concerning
the provisions of any document filed as an exhibit are of necessity brief
descriptions thereof and are not necessarily complete, and in each instance
reference is made to the copy of the document filed as an exhibit to the
Registration Statement, each such statement being qualified in its entirety by
this reference.
The Company is subject to the information requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in
accordance therewith the Company files reports, proxy statements and other
information with the Commission. Such reports, proxy statements and other
information may be inspected and copied at the public reference facilities
maintained by the Commission in Washington, D.C. and at its regional offices
located in Chicago, Illinois and New York, New York. Please call the Commission
at 1-800-SEC-0330 for more information on these public reference rooms. Copies
of such material, including the Registration Statement, can be obtained from the
Public Reference Section of the Commission, Room 1024, Judiciary Plaza, 450
Fifth Street, N.W., Washington, D.C. 20549, at prescribed rates. The Commission
also maintains an Internet web site at "http://www.sec.gov" that contains
reports, proxy and other information statements and other information regarding
companies, such as the Company, that file electronically with the Commission The
Company's Common Stock is quoted on the Nasdaq SmallCap Market. Reports, proxy
statements and other information concerning the Company can be inspected at the
National Association of Securities Dealers, Inc., 1735 K Street, N.W.,
Washington, D.C. 20006.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents, filed with the Commission by the Company under
the Exchange Act, are incorporated by reference into this Prospectus:
(a) The Company's Annual Report on Form 10-KSB/A for the fiscal
year ended September 30, 1997;
(b) The Company's Quarterly Reports on Form 10-QSB for the
quarters ended December 31, 1997 and March 31, 1998;
(c) The Company's Current Reports on Form 8-K and Form 8-K/A filed
April 20, 1998, May 11, 1998, May 28, 1998 and June , 1998;
and
(d) The description of the Company's Common Stock contained in the
Company's Form 8-A dated March 6, 1985.
All other reports and documents filed pursuant to Section 13(a), 13(c),
14 or 15(d) of the Exchange Act prior to the termination of this Offering shall
be deemed to be incorporated by reference in this Prospectus and shall be deemed
a part hereof from the date of filing of such reports and documents. Any
statement contained herein or in a document incorporated or deemed to be
incorporated herein by reference shall be deemed to be modified or superseded
for purposes of this Prospectus to the extent that a statement contained herein
or in any subsequently filed document that also is, or is deemed to be,
incorporated by reference herein modifies or supersedes such statement. Any such
statement so modified or superseded shall not be deemed, except as so modified
or superseded, to constitute a part of this Prospectus.
Copies of the above documents (other than exhibits to such documents,
unless such exhibits are specifically incorporated by reference into such
documents) are available upon written or oral request, without charge, from the
Company, 1901 Main Street, Suite 1200, Columbia, South Carolina 29201,
telephone: (803) 252-3661, Attention: Jerry F. Wells, Jr.
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THE COMPANY
General
UCI Medical Affiliates, Inc. ("UCI" or the"Company") is a holding
company that operates through its wholly-owned subsidiaries, UCI Medical
Affiliates of South Carolina, Inc., a South Carolina corporation ("UCI-SC"), and
UCI Medical Affiliates of Georgia, Inc., a South Carolina corporation
("UCI-GA"). Through these subsidiaries, the Company provides nonmedical
management and administrative services for its network of 48 freestanding
medical centers (the "UCI Centers") located in South Carolina, Georgia and
Tennessee. In compliance with applicable laws governing the corporate practice
of medicine, all medical services at the UCI Centers are provided by or under
the supervision of profesional corporations organized in each of the three
states in which the UCI Centers are located. These three profesional
corporations include Doctor's Care, P.A., a South Carolina professional
corporation ("DC-SC"), Doctor's Care of Georgia, P.C., a Georgia professional
corporation ("DC-GA"), and Doctor's Care of Tennessee, P.C., a Tennessee
professional corporation ("DC-TN"). Each of DC-SC, DC-GA and DC-TN
(collectively, the "UCI-PCs") operates solely to fulfill the licensed medical
provider responsibilities associated with the UCI Centers operating in its
respective state of organization. These responsibilities, as well as various
administrative, management and support functions, are carried out pursuant to
administrative services agreements between UCI-SC and DC-SC and betwen UCI- GA
and each of DC-GA and DC-TN.
The Company's principal executive offices are located at 1901 Main
Street, Suite 1200, Columbia, South Carolina 29201. The Company's telephone
number is (803) 252-3661.
Recent Acquisition
On May 13, 1998, UCI-GA acquired substantially all of the assets of
MainStreet Healthcare Corporation, a Delaware corporation ("MHC"), for a
purchase price of $8,050,000, plus the assumption of $594,185 of MHC's line of
credit, all as described in an Acquisition Agreement and Plan of Reorganization
dated February 9, 1998 (the "Agreement") by and among UCI-GA, UCI, MHC, certain
professional corporations associated with MHC, and the MHC shareholders. The
Agreement was amended on April 15, 1998, and further amended on May 7, 1998. The
acquisition of MHC (the "Acquisition") is being accounted for effective as of
May 1, 1998.
Prior to its acquisition by UCI-GA, MHC provided non-medical management
and administrative functions for nine medical facilities in the State of Georgia
and two medical facilities located in the State of Tennessee. The medical
services of the Georgia facilities are now provided by DC-GA, and the medical
services of the Tennessee facilities are now provided by DC-TN. Each of UCI-GA,
DC-GA and DC-TN were formed in 1988 for the purpose of acquiring the assets and
liabilities associated with the medical operations of MHC. Pursuant to the
Agreement, DC-GA purchased substantially all of the assets (including patient
records) of the Georgia professional corporation associated with MHC for a
purchase price of one hundred dollars. Similarly, pursuant to the Agreement,
DC-TN purchased substantially all of the assets (including patient records) of
the Tennessee professional corporation associated with MHC.
The consideration paid by UCI-GA in connection with the Acquisition was
determined by arms-length negotiations between UCI, UCI-GA and MHC. The purchase
price paid by UCI-GA in the Acquisition consisted in part of a cash payment by
UCI-GA at closing of $450,000 to an escrow agent appointed by MHC and the
delivery of a promissory note in the original principal amount of $800,000
executed by the UCI-GA in favor of the escrow agent. Such promissory note bears
interest at a rate of 6.5% per annum and is due and payable on August 1, 1998.
UCI guaranteed the promissory note. The purchase price received by the escrow
agent is to be used to pay certain creditors of MHC identified to the escrow
agent by MHC. Pursuant to the Agreement, UCI-GA also assumed all of MHC's
equipment and real property leases related to its facilities. UCI-GA expects to
continue the operations at such facilities in substantially the same manner as
they were conducted prior to the Acquisition.
The funds used for the cash portion of the purchase price in the
Acquisition were provided from a cash distribution to UCI-GA from its parent
company, UCI, out of a portion of the net proceeds received by UCI from the sale
by UCI of 1,200,000 shares of UCI common stock ("Common Stock") in a private
placement which closed on May 12, 1998 (the "Private Placement"). The net
proceeds to UCI of the Private Placement were $1,074,000. The shares issued in
the Private Placement are the shares to which this Prospectus relates.
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The balance of the purchase price of the Acquisition consisted of the
delivery to MHC of a Conditional Delivery Agreement (the "Conditional Delivery
Agreement") by and between UCI, UCI- GA and MHC which requires UCI to issue to
MHC 2,091,396 shares of the Common Stock of UCI after the approval of the
shareholders of UCI.
The issuance of the shares to MHC pursuant to the Conditional Delivery
Agreement requires the prior approval of the shareholders of UCI of (i) a
proposed amendment to UCI's Certificate of Incorporation to increase the number
of authorized shares of Common Stock from 10,000,000 to 30,000,000 shares, and
(ii) the issuance of the shares to MHC as provided in the Agreement. The
shareholders of UCI will vote on these proposed resolutions at the next meeting
of the shareholders of UCI which is scheduled to be held on or about July 31,
1998. The Conditional Delivery Agreement states that in the event the
shareholders of UCI fail to approve any of the required resolutions necessary to
issue the shares to MHC as provided in the Agreement, as amended, the
transactions contemplated in the Agreement, as amended, shall be unwound and
each of the parties to the extent possible shall be restored to its position
held prior to the closing.
RISK FACTORS
The securities offered hereby involve a high degree of risk. Each
prospective investor should carefully consider the following risk factors
inherent in, and affecting the business of, the Company and this Offering before
making an investment decision.
Nasdaq Delisting.
The Common Stock is currently listed for trading on the Nasdaq SmallCap
Market. The continued trading of the Common Stock on the Nasdaq SmallCap Market
is conditioned upon the Company meeting certain quantitative and qualitative
requirements regarding assets, capital, earnings surplus, stock price and
corporate governance features. During 1997, the NASD expanded the quantitative
and qualitative listing criteria for all companies listed on the Nasdaq Stock
Market and placed additional corporate governance listing standards on companies
currently listed on the Nasdaq SmallCap Market. These new requirements for
continued listing became effective as to the Company on February 23, 1998. On
February 26, 1998, UCI was formally notified by the Nasdaq Stock Market that a
review of its financial statements indicated that the Company was not in
compliance with the new requirements for continued listing as a consequence of
its failure to meet the requirement of at least $2 million in net tangible
assets. As of December 31, 1997, the Company had net tangible assets of
approximately $1 million. Giving effect to the Acquisition and the Private
Placement, the pro forma net tangible assets of the Company as of March 31, 1998
were approximately $3.45 million. Consequently, the Company believes that the
Company is currently in compliance with the Nasdaq Stock Market net tangible
assets requirement as well as with all other applicable listing requirements.
Prior to the Acquisition, the Company submitted a proposed plan of compliance to
the Nasdaq Stock Market indicating its proposed timetable for satisfying the new
listing requirements. Following the May 13, 1998 closing of the Acquisition, the
Company notified the Nasdaq Stock Market of the Company's belief that it was
then in compliance with applicable listing requirements. On June 8, 1998, the
Company was notified by the Nasdaq Stock Market that it was denying the
Company's request for continued Nasdaq listing. The Company has applied to
appeal this decision by Nasdaq. During the pendency of such appeal, the
Company's Common Stock will remain listed on the Nasdaq Stock Market. To the
extent that the Nasdaq Stock Market does not accept the Company's position
regarding satisfaction of the new maintenance criteria, the Common Stock will be
delisted, and trading in the Common Stock thereafter, if any, will likely be
conducted in the over-the-counter bulletin board. As a consequence of any such
delisting, it is expected that stockholders of UCI will find it more difficult
to dispose of, or to obtain accurate quotations as to the market value of, the
Common Stock. In addition, any such delisting will make the Common Stock
substantially less attractive as collateral for margin and purpose loans, for
investment by financial institutions under their internal policies or state
legal investment laws, as consideration in the financing of future acquisitions
of other medical practices by the Company, and for issuance by the Company in
future capital raising transactions. Although following a delisting, the Common
Stock may be eligible for quotation on the over-the-counter bulletin board, the
Company is informed that the NASD may presently be considering higher standards
for permitting quotations of securities on such bulletin board, thereby
foreclosing this trading market to UCI stockholders as well.
Disclosure Relating to Low-Priced Stocks.
In the event the Common Stock is delisted from the Nasdaq Stock Market,
as long as the trading price of the Common Stock is less than $5.00 per share,
trading in the Common Stock in the secondary market is subject to certain
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rules promulgated under the Securities Exchange Act of 1934, which rules require
additional disclosure by broker-dealers in connection with any trades involving
a stock defined as a "penny stock" (generally, any non-Nasdaq equity security
that has a market price of less than $5.00 per share, subject to certain
exceptions). Such rules require the delivery, prior to any penny stock
transaction, of a disclosure schedule explaining the penny stock market and the
risks associated therewith, and impose various sales practice requirements on
broker-dealers who sell penny stocks to persons other than established customers
and accredited investors. For these types of transactions, the broker-dealer
must make a special suitability determination for the purchaser and have
received the purchaser's written consent to the transactions prior to sale. The
additional burdens imposed upon broker-dealers by such requirements may
discourage broker-dealers from effecting transactions in the Common Stock, which
could severely limit the market liquidity of the Common Stock and the ability of
stockholders to sell the Common Stock in the secondary market.
History of Losses.
Investment in the shares may be considered to be speculative due to the
Company's operating history of losses, liquidity problems, uncertainty of
revenues, markets, profitability and the need for additional funding. The
Company incurred net losses of approximately $83,726 and $1,359,739 for the
years ended September 30, 1997 and 1995, respectively, and had incurred a net
loss of $1,051,319 for the six months ended March 31, 1998. The Company had net
income of $466,079 for the year ended September 30, 1996. The Company's
financial viability depends on the Company achieving a significant increase in
income from operations
Financial Status of MHC Following the Acquisition.
MHC has experienced losses and operating deficits since its inception
in February 1996. UCI expects that the operations associated with the assets
acquired in the Acquisition may continue to experience losses and require the
infusion of substantial capital to build those operations to a profitable state.
Although UCI management believes that the assets acquired from MHC in the
Acquisition are valuable to the Company's operations and are expected to
contribute to long-term profitability and enhanced stockholder value, there can
be no assurance that such expectations can be realized or that UCI can achieve
profitability as a consequence of the Acquisition. To the extent the Company's
expectations regarding the impact of the Acquisition are not realized, the
Company will require additional financing to implement its strategies and
achieve its objectives. The Company may seek such additional financing through
private financings, debt or equity offerings or collaborative arrangements with
others.
In addition, MHC continues to have various repayment obligations to its
third-party creditors. To the extent that MHC is unable to satisfy its
obligations to such creditors, MHC could be forced to file for protection under
applicable bankruptcy laws or could be placed into an involuntary bankruptcy
proceeding by its creditors. In such event, the transfer of assets to UCI
pursuant to the Acquisition could come under review of a bankruptcy trustee, who
could seek to characterize the transfer in the Acquisition as a preference that
could be set aside under applicable bankruptcy law, requiring UCI and MHC to
reverse the transactions comprising the Acquisition. Pursuant to the Acquisition
Agreement, MHC, the professional corporations associated with MHC, and certain
of the MHC stockholders have represented and warranted that they will not
hinder, delay, defraud or avoid any obligation to any past, present or future
creditor in the transactions contemplated by the Acquisition Agreement; that the
consideration received by MHC and the professional corporations associated with
MHC is more than a reasonably equivalent value in exchange for the transfer of
the assets of MHC and the professional corporations associated with MHC; that
each of MHC and the professional corporations associated with MHC is solvent and
will not be rendered insolvent as a result of the transactions contemplated by
the Acquisition Agreement; and that neither MHC nor any of the professional
corporations associated with MHC has initiated, nor does it intend to initiate
or expect to have initiated against it as debtor, any proceeding under federal
or any state's bankruptcy, insolvency or similar laws. Additionally, MHC and the
professional corporations associated with MHC have represented and warranted to
UCI-GA that MHC and the professional corporations associated with MHC shall, as
and when due, use their reasonable best efforts within eleven months after the
closing of the Acquisition to pay all valid liabilities of MHC and the
professional corporations associated with MHC which are not assumed by UCI-GA.
The Company's remedy for any breach of the foregoing by MHC, the professional
corporations associated with MHC or the MHC stockholders is subject to certain
limitations which apply to all breaches of the Acquisition Agreement. Although
MHC has represented that it intends to satisfy its third-party creditor
obligations following the Acquisition, in the event of a set-aside pursuant to
applicable bankruptcy law, the expected benefits to UCI from the Acquisition
would not be achieved and, subject to a possible recovery under the applicable
indemnification provisions of the Acquisition Agreement, the transaction costs
associated with the Acquisition would not be recoverable by UCI, thereby
adversely affecting UCI's operations.
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Managing Growth through Acquisitions.
The rapid growth of the Company's business through acquisitions has
required it to make additions in personnel and has increased its working capital
requirements. Such growth has resulted in new and increased responsibilities for
management and has placed additional demands upon the Company's management,
operating, financial, and technical resources. There can be no assurance that
these demands will not have a material adverse effect on the Company's business,
financial condition, and results of operations, nor can there be any assurance
that the Company will be able to attract or retain competent personnel and
improve its operational systems sufficiently to support the expansion of its
operations. The Company's business requires significant levels of working
capital. The Company may in the future require additional equity or debt
financing to support its increased working capital needs in connection with any
expansion of its business. Such financing may not be available on terms that are
favorable to the Company, if at all. Also important to the Company's success
will be its ability to achieve additional economies of scale in order to improve
its operating margins. There can be no assurance that the Company will be able
to obtain adequate working capital or achieve such economies of scale, and the
failure to do so could have a material adverse effect on the Company's business,
financial condition, and results of operations.
Competition.
The UCI Centers face competition, in varying degrees, from hospital
emergency rooms, private doctor's offices and other competing freestanding
medical centers. Some of these providers have financial resources which are
greater than those of the Company. In addition, traditional sources of medical
services, such as hospital emergency rooms and private physicians, have had, in
the past, a higher degree of recognition and acceptance by patients than centers
such as those operated by UCI. Following the Acquisition, the Company changed
the name under which the UCI Centers in Georgia and Tennessee publicly conduct
business. While the Company's management believes that such centers will be able
to compete on the basis of accessibility, including evening and weekend hours, a
non-appointment policy, the attractiveness to large employers and third-party
payors of the Company's state-wide network, and on the basis of a competitive
fee schedule, there can be no assurance that such centers will be able to
compete successfully in the future, or that the change in the name of such
centers will not adversely affect the operations of such centers.
Quarterly Fluctuations in Operating Results.
Operating results may fluctuate quarterly as a result of various
factors, including changes in demand for medical services, the introduction of
new services by the Company and its competitors, changes in third-party
reimbursement policies, changes in reimbursement rates, changes in the level of
operating expenses, the timing of acquisitions or investments, difficulty in
maintaining margins, and general competitive and economic conditions. The
Company believes that period-to-period comparisons of its operating results
should not be relied upon as an indication of future performance. It is possible
that in certain future periods, the Company's operating results may be below the
expectations of public market analysts and investors. In such event, the market
price of the Common Stock would likely be materially and adversely affected.
Government Regulation.
As participants in the health care industry, the Company's operations
and relationships are subject to extensive and increasing regulation by a number
of governmental entities at the federal, state and local levels. Prior to the
Acquisition, MHC's operations and relationships were also subject to such
regulation.
Limitations on the Corporate Practice of Medicine
Federal law and the laws of many states, including Georgia, South
Carolina and Tennessee, generally specify who may practice medicine and limit
the scope of relationships between medical practitioners and other parties.
Under such laws, business corporations such as UCI, UCI-SC, UCI-GA and MHC are
prohibited from practicing medicine or exercising control over the provision of
medical services. In order to comply with such laws, the medical director and
all medical services at the UCI Centers are provided by or under the supervision
of the UCI-PCs pursuant to contracts with the Company's wholly-owned
subsidiaries. The UCI-PCs are organized so that all physician services are
offered by the physicians who are employed by the UCI-PCs. None of UCI, UCI-SC
or UCI-GA employs practicing physicians as practitioners, exerts control over
any physician's decisions regarding medical care or represents to the public
that it offers medical services. UCI-SC has entered into an administrative
services agreement with DC-SC for the performance by UCI-SC of all
administrative, management and support functions of the UCI Centers in South
Carolina. As part of
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the Acquisition, UCI-GA also entered into an administrative services agreement
with each of DC-GA and DC-TN for the performance by UCI-GA of all
administrative, management and support functions of the UCI Centers in Georgia
and Tennessee. UCI-SC believes that the services it provides to DC-SC and the
services UCI-GA provides to DC-GA and DC-TN, which currently result in control
over the assets of the UCI-PCs and mandate financial statement consolidation
under generally accepted accounting principles, do not constitute the practice
of medicine under applicable laws. Accordingly, UCI believes that it is not in
violation of applicable state laws relating to the practice of medicine.
Nevertheless, because of the unique structure of the relationships
existing between UCI-SC, UCI-GA and the UCI-PCs, many aspects of UCI's business
operations have not been the subject of state or federal regulatory
interpretation. There can be no assurance that a review by the courts or
regulatory authorities of the business formerly conducted by any or all of the
Company or MHC or currently conducted by the Company will not result in a
determination that could adversely affect the operations of any or all of them
or that the healthcare regulatory environment will not change so as to restrict
the existing operations or proposed expansion of the Company's business.
Third Party Reimbursements
Prior to the Acquisition, approximately five percent of the revenues of
the Company and approximately 15 percent of the revenues of MHC were derived
from payments made by government-sponsored health care programs (principally,
Medicare and Medicaid). As a result, any change in reimbursement regulations,
policies, practices, interpretations or statutes could adversely affect the
operations of the Company. There are also state and federal civil and criminal
statutes imposing substantial penalties, including civil and criminal fines and
imprisonment, on healthcare providers that fraudulently or wrongfully bill
governmental or other third-party payors for healthcare services. The Company
believes it is in material compliance with such laws, but there can be no
assurance that the Company's activities will not be challenged or scrutinized by
governmental authorities.
Anti-Kickback Laws
Certain provisions of the Social Security Act, commonly referred to as
the "Anti-kickback Statute," prohibit the offer, payment, solicitation or
receipt of any form of remuneration in return for the referral of Medicare or
state health program patients or patient care opportunities, or in return for
the recommendation, arrangement, purchase, lease or order of items or services
that are covered by Medicare or state health programs. Many states have adopted
similar prohibitions against payments intended to induce referrals of Medicaid
and other third-party payor patients. Although the Company believes that it is
not in violation of the Anti-kickback Statute or similar state statutes, its
operations do not fit within any of the existing or proposed federal safe
harbors.
Self-Referral Laws
Significant prohibitions against physician referrals were enacted by
the U.S. Congress in the Omnibus Budget Reconciliation Act of 1993. Subject to
certain exemptions, a physician or a member of his immediate family is
prohibited from referring Medicare or Medicaid patients to an entity providing
"designated health services" in which the physician has an ownership or
investment interest or with which the physician has entered into a compensation
arrangement. While the Company believes it is currently in compliance with such
legislation, future regulations could require the Company to modify the form of
its relationships with physician groups. Some states have also enacted similar
self-referral laws, and the Company believes it is likely that more states will
follow. The Company believes that its practices fit within exemptions contained
in such laws. Nevertheless, expansion of the operations of the Company to
certain additional jurisdictions may require structural and organizational
modifications of the Company's relationships with physician groups to comply
with new or revised state statutes. Such modifications could adversely affect
the operations of the Company.
Antitrust Laws
Because each of the UCI-PCs is a separate legal entity, each may be
deemed a competitor subject to a range of antitrust laws which prohibit
anti-competitive conduct, including price fixing, concerted refusals to deal and
division of market. The Company believes it is in compliance with such state and
federal laws which may affect its development of integrated healthcare delivery
networks, but there can be no assurance that a review of the Company's business
by courts or regulatory authorities will not result in a determination that
could adversely affect the operations of the Company.
7
<PAGE>
Healthcare Reform
As a result of the continued escalation of healthcare costs and the
inability of many individuals to obtain health insurance, numerous proposals
have been or may be introduced in the U.S. Congress and in state legislatures
relating to healthcare reform. There can be no assurance as to the ultimate
content, timing or effect of any healthcare reform legislation, nor is it
possible at this time to estimate the impact of potential legislation, which may
be material, on the Company.
Regulation of Risk Arrangements and Provider Networks
Federal and state laws regulate insurance companies, health maintenance
organizations and other managed care organizations. Generally, these laws apply
to entities that accept financial risk. Certain of the risk arrangements entered
into by the Company could possibly be characterized by some states as the
business of insurance. The Company, however, believes that the acceptance of
capitation payments by a healthcare provider does not constitute the conduct of
the business of insurance. Many states also regulate the establishment and
operation of networks of healthcare providers. Generally, these laws do not
apply to the hiring and contracting of physicians by other healthcare providers.
The Company believes that it is in compliance with these laws in the states in
which it currently does business, but there can be no assurance that future
interpretations of these laws by the regulatory authorities in Georgia, South
Carolina, Tennessee or the states in which the Company may expand in the future
will not require licensure of the Company's operations as an insurer or provider
network or a restructuring of some or all of the Company's operations. In the
event the Company is required to become licensed under these laws, the licensure
process can be lengthy and time consuming and, unless the regulatory authority
permits the Company to continue to operate while the licensure process is
progressing, the Company could experience a material adverse change in its
business while the licensure process is pending. In addition, many of the
licensing requirements mandate strict financial and other requirements which the
Company may not immediately be able to meet. Further, once licensed, the Company
would be subject to continuing oversight by and reporting to the respective
regulatory agency.
Dilution and Voting Control.
Upon receipt of requisite shareholder approval, UCI has committed to
issue 2,091,396 shares of Common Stock to a designated escrow agent in
connection with the Acquisition and has committed to issue stock purchase
warrants (the "Warrants") for the purchase of up to 300,000 shares of Common
Stock as placement agent and financial advisory services fees in connection with
the May 12, 1998 Private Placement. Without giving effect to any other issuance
of Common Stock by UCI following the closing of the Acquisition, such additional
shares of Common Stock to be issued in connection with the Acquisition and
pursuant to the exercise of the Warrants would represent, in the aggregate,
approximately 24.7 percent of the number of shares of Common Stock outstanding
immediately after the closing of the Acquisition. Accordingly, the contemplated
issuance of shares in connection with the Acquisition and the exercise of the
Warrants would have the effect of substantially reducing the percentage voting
interest in UCI represented by a share of the Common Stock immediately prior to
such share issuances.
As of June 12, 1998, Companion HealthCare Corporation ("CHC") and
Companion Property and Casualty Company ("CP&C" and collectively with CHC, the
"BCBS Subsidiaries," or individually, a "BCBS Subsidiary"), each of which is a
wholly-owned subsidiary of Blue Cross Blue Shield of South Carolina ("BCBS"),
owned in the aggregate 2,624,623 shares, or approximately 43 percent, of the
outstanding Common Stock. Under various agreements between UCI and the BCBS
Subsidiaries (the "Anti-Dilution Agreements"), the BCBS Subsidiaries have the
right at any time to purchase from UCI such number of shares of the voting stock
of UCI as is necessary for BCBS and its affiliated entities, as a group, to
maintain an aggregate ownership of 47 percent of the outstanding voting stock of
UCI. To the extent either of the BCBS Subsidiaries exercises such right in
conjunction with a sale of voting stock by UCI, the price to be paid by the BCBS
Subsidiary is the average price to be paid by the other purchasers in such sale.
Otherwise, the price is the average closing bid price of the UCI voting stock on
the ten trading days immediately preceding the election by the BCBS Subsidiary
to exercise its purchase rights. Consequently, to the extent any of the BCBS
Subsidiaries elect to exercise any or a portion of their rights under the
Anti-Dilution Agreements following the Private Placement and, if approved, the
issuance of shares contemplated by the Acquisition and pursuant to the Warrants,
the sale of shares of Common Stock to such BCBS Subsidiary will have the effect
of further reducing the percentage voting interest in UCI represented by a share
of the Common Stock immediately prior to such sale.
8
<PAGE>
The substantial ownership of Common Stock by the BCBS Subsidiaries, MHC
and other affiliates of the Company following the Acquisition and the Private
Placement will provide them with the ability to exercise substantial influence
in the election of directors and other matters submitted for approval by the UCI
stockholders. As a result, it may be difficult for other stockholders of UCI to
successfully oppose matters which are presented by such entities for action by
stockholders, or to take actions which are opposed by such entities. Such
ownership may also have the effect of delaying, deterring or preventing a change
in control of UCI without the consent of such entities. In addition, sales of
Common Stock by such entities could result in another stockholder obtaining
control over UCI.
Resales of Common Stock and Market Volatility.
Upon receipt of requisite shareholder approval, UCI has committed to
issue 2,091,396 shares of Common Stock to a designated escrow agent in
connection with the Acquisition and the Warrants for the purchase of up to
300,000 shares of Common Stock as placement agent and financial advisory
services fees in connection with the Private Placement. In addition, 1,200,000
shares of Common Stock were issued to investors in the Private Placement.
Without giving effect to any other issuance of Common Stock by UCI following the
closing of the Acquisition, shares of Common Stock issued in the Private
Placement and the shares that may be issued pursuant to the Acquisition and
pursuant to the exercise of the Warrants represent, in the aggregate,
approximately 37.1 percent of the number of shares of Common Stock outstanding
immediately after such share issuances. The shares issued in connection with the
Private Placement and the shares UCI has committed to issue in connection with
the Acquisition and pursuant to the Warrants are considered "restricted
securities" under applicable securities laws, thereby limiting the resale of
such shares into the public market, in the absence of an effective registration
or exemption from such registration requirements. This Prospectus covers the
sale of the shares issued in the Private Placement. The holders of the shares to
be issued pursuant to the Acquisition and to the holders of the Warrants to be
issued in connection with the Private Placement have been granted registration
rights which entitle such holders to have such shares registered for sale into
the public market. To the extent that such holders do not exercise such
registration rights, all of such shares will nevertheless become eligible for
sale in the public market in accordance with the Securities and Exchange
Commission's Rule 144 or Rule 145 one year following the closing of the
Acquisition, with certain volume and manner of sale limitations continuing only
for one year thereafter (except as to shares held by persons deemed to be
affiliates of UCI). In addition, if the proposed amendment to the UCI
Certificate is approved by the stockholders at the Annual Meeting, UCI will
increase by 20 million the number of shares of Common Stock available for
issuance. Sales of substantial amounts of Common Stock, or the availability of
substantial amounts of Common Stock for future sale, could adversely affect the
prevailing market price of the Common Stock.
Trading in the Common Stock has historically been very limited, and
there can be no assurance that an active trading market for the Common Stock
will develop or be sustained. Because of the limited trading liquidity in the
Common Stock, the market price of the Common Stock has been vulnerable to
significant fluctuations in response to very limited market trading in such
shares. The market price of the Common Stock will remain subject to significant
fluctuations in response to such factors as well as in response to operating
results and other factors affecting the stock market generally. The stock market
in recent years has experienced price and volume fluctuations that often have
been unrelated or disproportionate to the operating performance of companies.
These fluctuations, as well as general economic and market conditions, may
adversely affect the market price of the Common Stock in the future.
Potential "Year 2000" Problems.
It is possible that the Company's currently installed computer systems,
software products or other business systems, or those of the Company's vendors,
working either alone or in conjunction with other software or systems, will not
accept input of, store, manipulate or output dates in the years 1999, 2000 or
thereafter without error or interruption (commonly known as the "Year 2000"
problem). The Company has conducted a review of its business systems, including
its computer systems, and is querying its vendors as to their progress in
identifying and addressing problems that their computer systems may face in
correctly processing date information as the year 2000 approaches and is
reached. However, there can be no assurance that the Company will identify all
such Year 2000 problems in its computer systems or those of its vendors or
resellers in advance of their occurrence or that the Company will be able to
successfully remedy any problems that are discovered. The expenses of the
Company's efforts to identify and address such problems, or the expenses or
liabilities to which the Company may become subject as a result of such
problems, could have a material adverse effect on the Company's business,
financial condition and results of operations.
9
<PAGE>
USE OF PROCEEDS
The Company will not receive any of the proceeds from the sale of the
Shares by the Selling Shareholders.
SELLING SHAREHOLDERS
In connection with the transaction pursuant to which the Shares were
issued to the Selling Shareholders, the Company granted certain registration
rights to each of the Selling Shareholders whereby the Company is obligated to
file one or more registration statements with respect to the Shares set forth
opposite such Selling Shareholder's name under the column heading "Shares
Offered Hereby" in the table below. The Registration Statement of which this
Prospectus forms a part is filed by the Company pursuant to the exercise of such
registration rights by each of the Selling Shareholders. In the grant of such
registration rights, the Company has agreed to pay all of the expenses of
registering the Shares offered hereby (other than any underwriter or selling
agent's discounts and commissions and fees and costs of legal counsel or other
advisors to the Selling Shareholders).
The following information has been provided to the Company by the
Selling Shareholders, including the number of shares of Common Stock
beneficially owned by the Selling Shareholders and the number of Shares being
offered for the account of the Selling Shareholders pursuant to this Prospectus.
Except as set forth in the notes to the table below, none of the Selling
Shareholders has held a position or office, or otherwise had a control
relationship, with the Company within the past three years.
<TABLE>
<CAPTION>
<S> <C>
Shares Beneficially Shares Beneficially Owned After the
Owned Prior to the Offered Offering (2)
Name of Selling Shareholder Offering (1) Hereby Shares Percentage
- -------------------------------- -------------------- ------------ ------------- ----------------
Huizenga Investments Limited Partership ....... 600,000 600,000 -0- -0-
Westbury (Bermuda) Ltd........................ 600,000 600,000 -0- -0-
</TABLE>
(1) The Shares were issued by the Company to the indicated shareholders on
May 12, 1998 in a private placement. Beneficial ownership reflected in
the table is determined in accordance with the rules and regulations of
the Commission and generally includes voting or investment power with
respect to securities. Except as otherwise specified, each of the
shareholders named in the table has indicated to the Company that such
shareholder has sole voting and investment power with respect to all
shares of Common Stock beneficially owned by that shareholder.
(2) Assumes that all of the Shares offered hereby are sold.
PLAN OF DISTRIBUTION
The Selling Shareholders have advised the Company that they intend to
sell the Shares offered hereby from time to time in the over-the-counter market,
including ordinary broker's transactions, in privately negotiated transactions,
or through sales to one or more dealers for resale of such Shares as principals,
at prevailing market prices at the time of sale, prices related to such
prevailing market prices, or at negotiated prices satisfactory to the Selling
Shareholders, or in any combination thereof. In effecting any public sales,
brokers or dealers may arrange for other brokers or dealers to participate. Any
such transaction may involve the payment of broker or dealer fees, commissions
or other remuneration to be negotiated and paid by the Selling Shareholder at
the time of the transaction.
Until such time as the Shares are eligible for public sale by the
Selling Shareholders under Rule 144 under the 1933 Act, the Registration
Statement of which this Prospectus forms a part must be current at the time any
Selling Shareholder makes any public sale of Shares.
The Company will not receive any proceeds from the sale of Common Stock
by the Selling Shareholders.
10
<PAGE>
The Company has agreed to pay all of the expenses of registering the
Shares offered hereby (other than any underwriter or selling agent's discounts
and commissions and fees and costs of legal counsel or other advisors to the
Selling Shareholders). See "Selling Shareholders."
LEGAL MATTERS
Certain legal matters in connection with the securities to which this
Prospectus relates have been passed upon for the Company by Nexsen Pruet Jacobs
& Pollard, LLP, Columbia, South Carolina.
EXPERTS
The financial statements of the Company as of September 30, 1997 and
1996, and for each of the years in the three-year period ended September 30,
1997, incorporated in this Prospectus by reference to the Company's Annual
Report on Form 10-KSB/A for the fiscal year ended September 30, 1997, have been
so included in reliance upon the report of Price Waterhouse LLP, independent
certified public accountants, and upon the authority of said firm as experts in
accounting and auditing.
11
<PAGE>
-------------------------------------------------------
No dealer, salesman or any other person has been authorized to give any
information or to make any representations in connection with this offering
other than those contained or incorporated by reference in this Prospectus. Any
information or representations not herein contained or incorporated by
reference, if given or made, must not be relied upon as having been authorized
by the Company or the Selling Shareholders. This Prospectus does not constitute
an offer to sell securities or a solicitation of an offer to buy any security
other than the securities offered by this Prospectus, nor does it constitute an
offer to sell or a solicitation of an offer to buy the securities by any person
in any jurisdiction where such offer or solicitation is not authorized, or in
which the person making such offer is not qualified to do so, or to any person
to whom it is unlawful to make such offer or solicitation. The delivery of this
Prospectus shall not, under any circumstances, create any implication that there
has been no change in the affairs of the Company since the date hereof.
------------------------
Table of Contents
<TABLE>
<CAPTION>
<S> <C>
Page
----
Available Information ...............................................................................................2
Incorporation of Certain Documents by Reference......................................................................2
The Company..........................................................................................................3
Risk Factors ........................................................................................................4
Use of Proceeds ....................................................................................................10
Selling Shareholders ...............................................................................................10
Plan of Distribution ...............................................................................................10
Legal Matters ......................................................................................................11
Experts ............................................................................................................11
</TABLE>
- --------------------------------------------------------------------------------
UCI MEDICAL AFFILIATES,
INC.
1,200,000 Shares
Common Stock
-------------
PROSPECTUS
-------------
June , 1998
-------------------------------------------------------
12
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.
The expenses in connection with the issuance and distribution of the
securities being registered, all of which will be paid by the Company, are
estimated as follows:
<TABLE>
<S> <C>
SEC Registration Fee............................................................................. $ 542
Printing Expenses...................................................................................... 2,000
Legal Fees and Expenses.................................................................................5,000
Accounting Fees and Expenses............................................................................2,000
Miscellaneous Expenses.................................................................................. 458
------
Total.......................................................................................$ 10,000
========
</TABLE>
Item 15. Indemnification of Directors and Officers
Except as hereinafter set forth, there is no statute, charter
provision, bylaw, contract or other arrangement under which any controlling
person, director or officer of the Registrant is insured or indemnified in any
manner against liability which such person may incur in such person's capacity
as such.
Section 145 of the Delaware General Corporation Law (the "Delaware
Act"), provides the Registrant with broad powers and authority to indemnify its
directors and officers and to purchase and maintain insurance for such purposes
and mandates the indemnification of the Registrant's directors under certain
circumstances. The Registrant's Bylaws also provide the Registrant with the
power and authority to the fullest extent legally permissible under the Delaware
Act to indemnify its directors and officers, persons serving at the request of
the Registrant or for its benefit as directors or officers of another
corporation and persons serving as the Registrant's representatives or agents in
certain circumstances. Pursuant to such authority and Bylaws provisions, the
Registrant may purchase insurance against certain liabilities that may be
incurred by it and its officers and directors.
Item 16. Exhibits.
Exhibit
Number Description
5 -- Opinion of Nexsen Pruet Jacobs & Pollard, LLP.
23.1 -- Consent of PriceWaterhouse LLP.
23.2 -- Consent of Nexsen Pruet Jacobs & Pollard (included in their
opinion filed as Exhibit 5).
Item 17. Undertakings.
<TABLE>
<S> <C>
(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this Registration Statement:
(i) To include any prospectus required by Section 10(a)(3) of the Securities Act
of 1933 (the "Securities Act");
</TABLE>
II-1
<PAGE>
<TABLE>
<S> <C>
(ii) To reflect in the prospectus any facts or events arising after the effective
date of the Registration Statement (or the most recent post-effective
amendment hereof) which, individually or in the aggregate, represent a
fundamental change in the information set forth in the Registration
Statement. Notwithstanding the foregoing, any increase or decrease in
volume of securities offered (if the total dollar value of securities offered
would not exceed that which was registered) and any deviation from the
low or high end of the estimated maximum offering range may be reflected
in the form of prospectus filed with the Commission pursuant to Rule
424(b) if, in the aggregate, the changes in volume and price represent no
more than a 20 percent change in the maximum aggregate offering price set
forth in the "Calculation of Registration Fee" table in the effective
Registration Statement.
(iii) To include any material information with respect to the plan of distribution
not previously disclosed in the Registration Statement or any material change
to such information set forth in the Registration Statement;
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if
the Registration Statement is on Form S-3, Form S-8 or Form F-3, and the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed with or furnished to the
Commission by the Registrant pursuant to Section 13 or Section 15(d) of the
Exchange Act that are incorporated by reference in the Registration
Statement;
(2) That, for the purpose of determining any liability under the Securities Act, each such
post-effective amendment shall be deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering
thereof.
(3) To remove from registration by means of a post-effective amendment any of the securities
being registered which remain unsold at the termination of this Offering.
(b) Insofar as indemnification for liabilities under the Securities Act may be permitted to directors,
officers and controlling persons of the Registrant pursuant to the provisions described under Item 15 above, or otherwise,
the Registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is
against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the Registrant of expenses incurred or paid by a
director, officer or controlling person of the Registrant in the successful defense of any action, suit or proceeding) is
asserted by such director, officer or controlling person in connection with the securities being registered, the
Registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a
court of appropriate jurisdiction the question whether such indemnification is against public policy as expressed in the
Securities Act and will be governed by the final adjudication of such issue.
</TABLE>
II-2
<PAGE>
SIGNATURES
In accordance with the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Columbia, State of South Carolina, on June 12, 1998.
UCI MEDICAL AFFILIATES, INC.
By: /s/ M.F. MCFARLAND, III, M.D.
M. F. McFarland, III, M.D.
Chairman of the Board, President and
Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
<S> <C>
Signature Title Date
--------- ----- ----
/s/ M.F. McFARLAND, III, M.D. Chairman of the Board, President and June 12, 1998
- ---------------------------------------
M.F. McFarland, III, M.D. Chief Executive Officer
/s/ JERRY F. WELLS, JR. Chief Financial Officer, Executive Vice June 12, 1998
- ---------------------------------------
Jerry F. Wells, Jr. President of Finance, and Corporate
Secretary (principal financial and
accounting officer)
/s/ RUSSELL J. FRONEBERGER Director June 12, 1998
- -------------------------------
Russell J. Froneberger
/s/ HAROLD H. ADAMS, JR. Director June 12, 1998
- ---------------------------------
Harold H. Adams, Jr.
/s/ CHARLES M. POTOK Director June 12, 1998
- -----------------------------------
Charles M. Potok
/s/ THOMAS J. FAULDS Director June 12, 1998
- -----------------------------------
Thomas J. Faulds
/s/ ASHBY JORDAN, M.D. Director June 12, 1998
- ---------------------------------
Ashby Jordan, M.D.
</TABLE>
II-3
<PAGE>
INDEX TO EXHIBITS
Exhibit
Number Description
------ -----------
5 -- Opinion of Nexsen Pruet Jacobs & Pollard, LLP.
23.1* -- Consent of Price Waterhouse LLP.
23.2 -- Consent of Nexsen Pruet Jacobs & Pollard (included
in their opinion filed as Exhibit 5).
- ----------------------
* - To be filed by amendment.
II-4
EXHIBIT 5
[LETTERHEAD OF NEXSEN PRUET JACOBS & POLLARD, LLP]
June 12, 1998
UCI Medical Affiliates, Inc.
1901 Main Street, Suite 1200
Columbia, South Carolina 29201
RE: Form S-3 Registration Statement
Gentlemen:
We have acted as counsel to UCI Medical Affiliates, Inc., a Delaware
corporation (the "Company"), in connection with the registration of 1,200,000
shares of the Company's $0.05 par value common stock (the "Common Stock"),
pursuant to a registration statement on Form S-3 to be filed with the Securities
and Exchange Commission (the "Registration Statement").
We have examined and are familiar with the Certificate of Incorporation
and the Bylaws of the Company, and have examined the originals, or copies
certified or otherwise identified to our satisfaction, of corporate records,
including minute books, of the Company. We have also examined the Registration
Statement and such statutes and other records, instruments and documents
pertaining thereto that we have deemed necessary to examine for the purposes of
this opinion. In our examination, we have assumed the completeness and
authenticity of any document submitted to us as an original, the completeness
and conformity to the originals of any document submitted to us as a copy, the
authenticity of the originals of such copies, the genuineness of all signatures
and the legal capacity and mental competence of natural persons.
On the basis of and in reliance upon the foregoing, we are of the
opinion that the shares of Common Stock registered under the Registration
Statement (in the form declared effective by the Commission) are legally issued,
fully paid and nonassessable.
This opinion is being rendered to be effective as of the effective date
of the Registration Statement. We hereby consent to the filing of this opinion,
or copies thereof, as an exhibit to the Registration Statement and to the
statement made regarding our firm under the caption "Legal Matters" in the
prospectus included in the Registration Statement, but we do not thereby admit
that we are within the category of persons whose consent is required under the
provisions of the Securities Act of 1933, as amended, or the rules and
regulations promulgated by the Securities and Exchange Commission thereunder.
Very truly yours,
NEXSEN PRUET JACOBS & POLLARD, LLP
By: /s/ WILLIAM S. MCMASTER
-----------------------
William S. McMaster
