UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB/A
(x) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES ACT OF 1934
For the quarterly period ended September 30, 1996
or
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES ACT OF 1934
For the transition period from to
Commission file number 2-89401
PHYSICIANS LASER SERVICES, INC. (f/k/a EX-CEL RESOURCES, INC.)
(Exact name of small business issuer as Specified in its Charter)
Delaware 13-3188137
(State of incorporation) (IRS identification no.)
3200 N. Federal Highway, Suite 226, Boca Raton, FL 33431
(Address of Principal Executive Office)
Registrant's telephone number, including area code:(561) 750-2300
P.O. Box 907, Boca Raton, FL 33429-0907
(Former address, if changed since last report)
Check whether the Registrant (1) has filed all reports
required to be filed by Section 13 of 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or for such
shorter period that the Registrant was required to file such
reports) and (2) has been subject to such filing requirements for
the past 90 days: Yes x or No
APPLICABLE ONLY TO REGISTRANTS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS:
Check whether the Registrant has filed all documents and reports
required to be filed by Section 12, 13 or 15(d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities
under a plan confirmed by a court. Yes No .
APPLICABLE ONLY TO CORPORATE REGISTRANTS
State the number of shares outstanding of each of the
Registrant's classes of common stock, as of the latest practicable
date: 5,466,334 shares as of September 30, 1996.
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements.
UNAUDITED FINANCIAL STATEMENTS
FOR THE 9 MONTHS ENDED SEPTEMBER 30, 1996
These statements contain all normally recurring adjustments
that are common, in management's opinion, and necessary for a
fair presentation.
Further, the financial statements are condensed and do not
contain all disclosures required by General Accounting
Principles to be included in a full set of financial
statements.
<PAGE>
PHYSICIANS LASER SERVICES, INC.
CONSOLIDATED BALANCE SHEET
SEPTEMBER 30, 1996
<TABLE>
<CAPTION>
9/30/96 9/30/95 12/31/95
(UNAUDITED) (UNAUDITED) (UNAUDITED)
ASSETS Restated Restated
<S> <C> <C> <C>
Current assets:
Cash $ 54,504 $ 17,718 $ 23,571
Receivables 11,934 12,120 11,496
Prepaid expenses 53,341 46,667 67,086
---------- ---------- ----------
Total current assets 119,779 76,505 102,153
Property, Plant & Equipment, net of
Depreciation of $50,283, $15,196,
$30,070, respectively 270,365 282,918 356,471
Other assets:
Security deposits 12,717 11,232 11,868
Deferred Interest 7,543 --- ---
Organization expense 950 --- ---
Loan receivable-Officer 47,259 --- ---
---------- ---------- ----------
Total other assets 68,469 11,232 11,868
---------- ---------- ----------
TOTAL ASSETS $ 458,613 $ 370,655 $ 470,492
---------- ---------- ----------
LIABILITIES & EQUITY
Current Liabilities:
Payables 68,106 21,407 47,420
Loans payable-Employees 5,274 --- ---
Current maturities of Long term debt 132,128 109,217 155,339
Convertible debenture --- --- 52,500
---------- ---------- ----------
Total current liabilities 205,508 130,624 255,259
---------- ---------- ----------
Long term debt:
Notes payable and Capitalized Leases,
net of current maturities 164,628 206,908 277,191
---------- ---------- ----------
Shareholders equity:
Common stock 54,663 15,620 40,118
Common stock subscriptions 45,000 --- ---
Paid in capital 308,865 198,815 174,917
Retained earnings (Deficit) (320,051) (181,312) (276,993)
---------- ---------- ----------
Total shareholders equity 88,477 ( 33,123) ( 61,958)
---------- ---------- ----------
TOTAL LIABILITIES & EQUITY $ 458,613 $ 370,655 $ 470,492
---------- ---------- ----------
</TABLE>
<PAGE>
PHYSICIANS LASER SERVICES, INC.
CONSOLIDATED STATEMENT OF INCOME
SEPTEMBER 30, 1996
<TABLE>
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEBMBER 30 SEPTEMBER 30
1995 1996 1995 1996
(UNAUDITED) (UNAUDITED)
Restated Restated
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Revenues $ 126,533 $ 117,156 $ 497,123 $ 299,259
Cost of Sales 105,796 25,376 240,725 47,537
---------- ---------- ---------- -----------
Gross Profit 20,737 91,780 256,398 251,722
---------- ---------- ---------- -----------
Operating expenses:
Marketing expense 8,801 5,222 27,240 8,038
General & Administrative
expenses 132,092 77,391 399,534 181,246
---------- ---------- ---------- ----------
Total expenses 140,893 82,613 426,774 189,284
---------- ---------- ---------- ----------
Operating (Loss) (120,156) 9,167 (170,376) 62,438
Other income net of other expenses:
Other income 31,653 --- 31,653 ---
Other expenses ( 237) 4,437 ( 27,243) 14,032
---------- ---------- ---------- ----------
31,416 4,437 4,410 14,032
---------- ---------- ---------- ----------
Net (Loss) $ (88,740) $ 4,730 $(165,966) $ 48,406
---------- ---------- ---------- ----------
Earnings (Loss) per share:
Number of shares outstanding 5,466,334 1,662,000 5,466,334 1,662,000
(Loss) on common stock &
equivalents $ (.0162) $ (.0304)
(Loss) on 6,995,634
fully diluted shares $ (.0128) $ (.0239)
Earnings on common stock
& equivalents $ .0028 $ .0291
Earnings on 2,062,000
fully diluted shares $ .0023 $ .0235
</TABLE>
<PAGE>
Physicians Laser Services, Inc.
Statement of Cash Flows
9 months ended 9/30,96, 6 months ended 6/30/96, & 12 months ended
12/31/95
<TABLE>
<CAPTION>
9/30/96 06/30/96 12/31/95
<S> <C> <C> <C>
Cash flows from operating activities:
Cash received from customers $ 507,205 $ 88,628 $ 189,913
Interest and dividends received 8
Other operating receipts 22,000
Cash paid to suppliers and employees (667,344) (200,812) (254,334)
Interest paid (27,243) (27,006) (33,450)
Increase in officer's loan (47,259)
Increase in Deferred Interest Expense (22,661)
(Increase) Decrease in Other Assets 15,230 (2,547)
Increase) Decrease in Prepaid Expenses (20,356) 34,101
Non cash expense for Depreciation 58,013 45,041
Increase (Decrease) in Accounts Payable 58,883
---------- -------- ----------
Net cash provided (used) by operating
activities (53,604) (132,515) (97,871)
---------- -------- ----------
Cash flows from investing activities:
Cash payments for the purchase of property (51,505) (146,095) (205,889)
---------- -------- ----------
Net cash provided (used) by investing
activities (51,505) (146,095) (205,889)
---------- -------- ----------
Cash flows from financing activities:
Proceeds from issuance of long-term debt
351,974
Proceeds from Convertible Debenture
52,500
Proceeds from issuance of common stock 192,360 275,604 31,570
Increase (Decrease) in security deposits
(11,232)
Principal payments on long-term debt (61,265) 25,077 (114,605)
---------- -------- ---------
Net cash provided (used) by financing
activities 131,095 300,681 310,207
---------- --------- ---------
Net increase (decrease) in cash and
equivalents 25,986 22,071 6,447
Cash and equivalents, beginning of year 28,518 6,447 ---
---------- --------- ---------
Cash and cash equivalents, end of year $ 54,504 $ 28,518 $ 6,447
========== ========== =========
</TABLE>
<PAGE>
Physicians Laser Services, Inc.
Statement of Cash Flows
For the years ended September 30, 1996, 1996 and 1995
<TABLE>
<CAPTION>
9/30/96 6/30/96 12/31/95
<S> <C> <C> <C>
Reconciliation of net income to
net cash provided by operating
activities:
Net Income $ (165,966) $ (77,226) $ (167,865)
----------- ---------- -----------
Adjustments to reconcile net
income to net cash provided
by operating activities:
Depreciation and amortization 58,013 45,041 30,070
(Increase) decrease in accounts
receivable 10,082 (14,520) (7,496)
(Increase) decrease in prepaid
expenses (20,356) 34,101
(Increase) decrease in other
assets 15,230 (72,467)
Increase (decrease) in accounts
payable 49,393 (47,444) 22,023
Increase (decrease) in payroll
taxes payable 25,397
----------- ---------- -----------
Total adjustments 112,362 (55,289) 69,994
----------- ---------- -----------
Net cash provided (used) by
operating activities $ (53,604) $(132,515) $ (97,871)
=========== =========== ===========
</TABLE>
PHYSICIANS LASER SERVICES, INC.
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 1996
NOTE 1: ORGANIZATION AND BUSINESS:
The financial statements include the accounts of Physicians Laser
Services, Inc.(PLSI) and its wholly owned subsidiaries Physicians
Laser Services of Florida, Inc. (PLSF) and Physicians Laser
Services of Connecticut, Inc. (Formerly United Laser Systems, Inc.)
(PLSCT).
PLSI is a publicly owned corporation in existence since March 16,
1982. The company had no business operation during 1995. In
September 1995 PLSI acquired 100% of the stock of PLSF. This
combination was treated as a Pooling of Interests. During May 1996
PLSI acquired 100% of the stock of PLSCT. It was a closely-held
Connecticut corporation that was a successor to a limited liability
company owned by the same shareholders of PLSCT. This combination
was treated as a Pooling of Interests and prior period financial
statements were restated to reflect the pooled operations to
include PLSCT.
Both PLSF and PLSCT operate businesses that rent laser equipment to
Doctors, Clinics, and Hospitals in Florida, Connecticut and New
York, respectively. Daily rental of the medical lasers are
delivered by van to the renters' locations by the company's
technicians who assist the physicians in the use of the laser
equipment.
The cost of the equipment and improvements is depreciated on the
straight line and accelerated methods over the class life of the
assets. Leasehold improvements are amortized over the shorter of
the estimated useful lives, or the underlying lease term. Repairs
and maintenance which do not extend the useful lives of the related
assets are expensed.
NOTE 2: LONG TERM DEBT
Van Loans:
Interest at 9.99% due in monthly
installments of $440 including
interest to July 2000, secured by a van $ 16,556
Interest at 9.99% due in monthly
installments of $419 including interest to
July 2000, secured by a van. $ 16,097
Term Loans:
Interest at 18.43% due in monthly
installments of $1,230 inclusive of interest
to February 2000 with a lump sum payment of
$5,000 in March 2000, secured by
personal guarantees of the Officers, and $ 60,350
Interest at 18.43% due in monthly installments
of $615 inclusive of interest to February 2000
with a lump sum payment of $2,000 in March
2000, secured by personal guarantees of the
Officers. $ 30,175
Lease - Laser equipment $2,423.46 per month
- 23 months $ 55,288
Home equity loan by former owners of PLSCT
as makers and guarantors, and secured by their
personal residence, variable interest at 1.5%
over Prime, with no fixed principal payments $ 28,368
Installment note approved up to $115,000,
variable interest at 1.5% over Prime,
monthly payments of principal and interest
for 36 months secured by all business
assets of PLSCT, liens on Laser equipment
of PLSCT, and a third mortgage on prior
stockholder's personal residence $ 89,922
-----------
Total long term debt 296,756
Less: current portion 132,128
-----------
$164,628
===========
Total maturities of long term debt are:
1996 $ 25,016
1997 100,067
1998 89,923
1999 63,180
2000 18,570
---------
$ 296,756
=========
NOTE 3: CAPITALIZED LEASES:
The assets and liabilities under capital leases are recorded at the
lower of the present value of the minimum lease payments or the
fair value of the asset. The assets are amortized over the lower of
their related lease terms or their estimated productive lives.
Amortization of assets under capital leases is included in
depreciation expense.
The following is a schedule of minimum lease payments due under
capitalleases as of September 30, 1996:
1996 $ 12,805
1997 51,221
1998 41,077
1999 22,140
2000 18,570
-----------
$145,813
===========
NOTE 4: STOCKHOLDERS' EQUITY:
The authorized capital of the company is 10,000,000 shares of
Preferred Stock, Par Value $.25, and 10,000,000 shares of Common
Stock, Par Value $.01. There are no shares issued of Preferred
Stock. There are 5,466,334 shares of Common Stock issued and
outstanding.
Options: As at September 30, 1996 there are options outstanding to
purchase 994,300 shares of the Company's common stock at various
prices from $.25 to $2.00 per share.
NOTE 5: RELATED PARTY TRANSACTIONS:
In the normal course of business, the company performs laser rental
services for entities that are owned by related individuals.
The company has entered into a sub-leasing agreement with an
officer of the company for laser equipment. The company has no
option to purchase this equipment at expiration of the lease.
Loan receivable - Officer is due from the former principal owner of
PLSCT. It was on the records as of the date PLSCT combined with
PLSI. He is now a stockholder of PLSI, and is the chief operating
officer of PLSCT.
Item 2. Management's Discussion and Analysis or Plan of Operation.
(a) Plan of Operation: The Registrant's cash requirements for
November and December of 1996 are as follows: $50,000 for general
corporate operations, $25,000 for Corporate and Florida marketing
expenses, $45,000 for collective marketing expenses for its three
other existing subsidiary companies, Physician Laser Services of
Connecticut ("PLSCT"), New York ("PLSNY") and Virginia ("PLSVA"),
and a $30,000 reserve for contingencies. The total 1996 projected
cash requirement is $150,000. The Registrant's cash needs for 1997
is expected to be $500,000, including a cash reserve for potential
acquisitions.
The Registrant expects to meet its cash requirements as follows:
During the remainder of 1996 the Company expects to generate
approximately $80,000 from continuing operations, and $15,000 from
a private lender. The Company presently has $50,000 cash on hand.
The Registrant expects to make one more acquisition prior to the
end of 1996, pursuant to an executed Letter of Intent. Sales for
the year ended December 31, 1996 are projected to be approximately
$1,000,000. As of September 30,1996, the Company has had $497,123
in sales.
The Registrant intends to make four acquisitions during 1997, and
as a result of these acquisitions, expects to generate
approximately $4,700,000 in sales with a pre-tax profit of
approximately $716,000.
The Registrant intends to privately offer additional securities in
1997, and anticipates raising approximately $3,000,000 in capital
as a result of such offering.
In part these projections are contingent upon matters and market
conditions beyond the Registrants' control, and therefore the
Registrant cannot guarantee the results.
(b) Management's Discussion and Analysis of Financial
Condition and Results of Operation - (1) Full Fiscal Years: The
Registrant has been dormant and has not conducted general business
operations for the 5 years preceding December 31, 1995. Commencing
in the last quarter of 1995, the Registrant commenced business
operations as a going concern through its subsidiary, Physicians
Laser Services of Florida, Inc. ("PLSF"), which was incorporated in
early February of 1995, and acquired by the Registrant in October
of 1995. Consequently, the Financial Statements of comparable
periods in 1995 were restated as a result of pooling of interests.
Additionally, the Registrant acquired Physicians Laser Services of
Connecticut (PLSCT) in May of 1996 as a pooling of interests, which
resulted in further restatement of prior period financials.
Consequently, it is not possible to make comparisons with years
prior to 1995. It should be noted that the Registrant is a growth
company.
(b)(2)(i) Liquidity: Based on unaudited third quarter figures,
the working capital deficit improved from a negative $153,106
restated as of December 31, 1995 to a negative of $85,729 as of
September 30, 1996, an improvement of $67,377 or approximately 44%.
Retained earnings as shown in the attached balance sheet contain
$154,085 in accumulated losses as shown on the Ex-Cel Resources,
Inc. Balance Sheet contained in Form 10-Q from September 30, 1995.
These losses were generated by Ex-Cel Resources, Inc. prior to the
merger with Physicians Laser Services, Inc. This negative figure
continues to impact current net worth figures. Net worth improved
by $150,435 (or approximately 245%) from a negative of $61,958
restated as of December 31, 1995 to a positive $88,477 as of
September 30, 1996.
Sales increased to an average of $55,236 per month during fiscal
year 1996 from an average of $24,938 per month during fiscal year
1995, which represents an average increase in sales of
approximately 222% or $39,298 per month. The Company experienced a
net loss of $88,740. This figure included an extraordinary expense
item of $40,000 and approximately $13,000 in depreciation.
Notwithstanding these adjustments, the net loss would have been
$35,740.
(b)(2)(ii) Internal and external sources of liquidity: The
Registrant is showing $54,504 in cash and $11,934 in receivables on
its 9/30/96 financial statement. The Registrant could experience an
increase in liquidity for the balance of 1996 as a result of
positive cash flow from operations, which is expected to amount to
$81,362 for the 3 months ending December 31, 1996. This cash flow
will be generated by the two existing subsidiaries Physicians Laser
Services of Florida ("PLSF") and PLSCT, as well as two additional
subsidiaries (PLSVA and PLSNY) which have been acquired as of
October 30, 1996 and November 4, 1996 respectively. PLSCT and PLSF
are expected to contribute $65,112 collectively. PLSNY is expected
to lose $15,000, and PLSVA is expected to contribute $31,250.
Revenues from the Registrant's subsidiaries should equal $2.5
million in 1997, which does not take into account the additional
revenue which will be generated by the expected acquisition of
sclero (varicose vein) and hair removal lasers. Factors that may
adversely affect the Registrant's cash flow include significant
technology change, inability to obtain the capital necessary to
purchase the required number of laser devices, increases in
competition in the market, and the Registrant's ability to obtain
and retain new clients.
The necessary capital expenditure the Registrant expects to make
from the operation of each of, PLSF, PLSCT, and PLSVA is expected
to average $25,000 per unit, for a total of $100,000.
(b)(2)(iii) Material commitments for capital expenditures and the
expected sources for funds for such expenditures: Other than as
previously noted above, the Registrant expects to make no
additional material commitments for capital expenditures.
(b)(2)(iv) Known trends, events or uncertainties that have had
or are reasonably expected to have a material impact on net sales
or revenues or income: The known trends, events or uncertainties
that Registrant reasonably expects to have a material favorable
impact on income include its plans to acquire other mobile laser
companies operating and located throughout the United States.
Through August of 1996, the Registrant has identified 10
acquisition candidates. The acquisitions are anticipated to be made
through the issuance of restricted shares of the Registrant's
common stock in exchange for the target laser company's common
stock.
In addition, the Registrant expects its revenues to increase
as more physicians are recruited as customers for the rental of its
mobile lasers in the Registrant's primary service area in South
Florida, and as physicians are recruited as customers for the
rental of its mobile lasers on Florida's west coast. However,
increases in competition, the Registrant's inability to employ a
sufficient marketing and sales force, among other factors, may
adversely affect the Registrant's anticipated increase in revenues.
(b)(2)(v) Significant elements of income or loss that do not
arise from the Registrant's continuing operations: see (b)(2)(iv)
above.
(b)(2)(vi) Causes for any material changes from period to
period in one or more line items: None.
(b)(2)(vii) Seasonal aspects that had a material effect on the
financial condition or results of operations: Revenues during the
spring and summer season are traditionally lower in Registrant's
south Florida market than during the fall and winter season.
During the fall and winter season months, the population of this
market increases approximately 50.0%. The seasonal factor during
this reporting period was significant since the operations of the
Registrant were concentrated in the south Florida market. At the
next reporting period the seasonal factor will be diminished by the
inclusion of revenues from announced acquisitions of PLSNY and
PLSVA. During future reporting periods, this factor is expected to
diminish to a greater degree by the inclusion of revenues from
acquisition of additional companies throughout the country which
are not impacted by such seasonal factors to the same degree as the
Florida subsidiary. If these additional acquisitions are not
accomplished, the seasonal factor may impact revenues once again.
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
NONE
Item 2. Changes in Securities.
NONE
Item 3. Defaults Upon Senior Securities.
NONE
Item 4. Submission of Matters to a Vote of Securities Holders
NONE
Item 5. Other Information.
A letter of intent, dated July 11, 1996, was entered into
between the Registrant and Tri-State Laser Corp. ("Tri-State") of
Williamsburg, Ohio to acquire all of the outstanding securities of
Tri-State. The transaction is anticipated to close on or before
December 15, 1996. The Registrant shall issue an undetermined
number of restricted shares of its common stock, as consideration
for the transaction.
Item 6. Exhibits, Financial Statement Schedules and Reports on
Form 8-K.
(a) Exhibits:
Letter of Intent, Tri-State Laser Corp.
(b) Reports on Form 8-K:
N/A
SIGNATURES
In accordance with the requirements of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to
be signed in its name and on its behalf in the City of Boca Raton,
State of Florida on this 22nd day of August, 1996.
Physicians Laser Services, Inc.
f/k/a Ex-Cel Resources, Inc.
By:/s/ Raymond F. Stack, President
<PAGE>
EXHIBIT C LETTER OF INTENT
Date: July 11, 1996
TO: Allen Taylor and Colin Herd, MD. Here (sometimes
jointly herein called "Shareholder" of Tri-State
Laser Corp., an Ohio Corporation (TLC).
FROM: Physicians Laser Services, Inc. (PLS)
PLS offers through this mutual non-binding Letter of Intent to
Shareholder to acquire all of the issued and outstanding common
stock of TLC, in exchange for Rule 144 Common Shares of PLS, under
the terms herein, and subject to the conditions herein:
A. PLS will exchange with the Shareholder 100% of the issued and
outstanding common shares of TLC for common shares of PLS on a
closing date fixed below (Closing).
B. The number of PLS common shares to be received by Shareholder
shall be as follows:
(1) There shall be a computation made by multiplying by five (5)
TLC's income before taxes as shown by a compilation prepared by
TLC's CPA and accepted by PLS of its projected balance sheet and
income and expense statement for the 12 month period beginning
November 1, 1996 (Base Period). The product of this multiplication
shall be divided by $1.00 and the result to the nearest whole
number shall be the nmber of PLS common shares received by
Shareholder under the paragraph b(1).
(2) Within 90 days after the end of the Base Period, TLC shall
have prepared for it an audit by its CPA of the Base Period (First
Adjusted Base Period). To the extent the audited income before
taxes of the First Adjusted Base Period exceeds the income before
taxes of the Base Period, shall receive additional common
share of PLS. The excess income before taxes shall be multiplied
by five (5) and the product of this multiplication shall be divided
by $1.00. The result subject to paragraph B(4), shall be the
number of additional PLS common shares to be received by
Shareholder, from the First Adjusted Base Period Computation. The
shares to be received shall be adjusted to the nearest whole share.
(3) To the extent that the income before taxes in the First
Adjusted Base Period is less than the income before taxes in the
Base Period, Shareholder shall return to PLS in the amount computed
as follows: the deficit between income before taxes of the First
Adjusted Base Period and the income before taxes of the Base Period
shall be multiplied by five (5) and the product of this
multiplication amount shall be divided by $1.00, and its result
shall be equal to the nearest number of whole shares to be returned
to PLS.
(4) a) The adjustment provided for in Paragraphs B(2) and B(3)
of additional shares shall not be limited.
b) The adjustment provided for Paragraphs B(2) and B(3) of
"give-back" shares shall be limited to 50% of the number of PLS
shares received by the Shareholder originally under the Base Period
computation.
(5) Within 90 days after the end of the 12 months period ending
10/31/98, and upon completion of an audit by TLC's CPA (Second
Adjusted Base Period), Shareholder may be eligible for additional
shares of PLS stock. To the extent that the income before taxes as
shown on the audited statement of the Second Adjusted Base Period
exceeds the income before taxes of the First Adjusted Base Period,
such excess shall be multiplied by five (5) and divided by $1.00.
Shareholder shall be entitled to the nearest number of PLS whole
shares equal to 50% of such amount.
(6) The $1.00 figure referred to herein was a number arrived at
through negotiation between the parties. If at the time of
computation under paragraph B(1), B(2), B(3) and B(4) PLS shares
shall be publicly traded on average for less that $3.00 over the 20
previous trading days there shall be an equitable adjustment in the
$1.00 figure.
C. Allen Taylor's Employment Contract shall state that he shall be
employed as President of TLC with Compensation as stated in the
Base Period for three years, and an additional two years provided
he shall continue to hold 25% of PLS shares he shall receive herein
as adjusted herein. Thereafter his employment Contract will be
renewable annually unless notice to the contrary is received by the
other party. Allen shall be elected to be a member to the Board of
Directors of TLC so long as he shall continue to hold 25% of PLS
shares he shall receive herein as adjusted herein. Colin Herd, MD
shall be elected to the Board of Directors of TLC so long as he
shall continue to hold 25% of the PLS shares he shall receive
herein as adjusted herein.
D. Allen Taylor shall receive an annual bonus based upon profits
of TLC in accordance with the Base Period's Compilation.
E. For a period of 5 years Colin Herd, MD shall have complimentary
(no charge) use of TLC lasers (that have been financed with Colin
Herd, MD) in any medical practice located within the geographical
area serviced by TLC. The dates that lasers will be provided to
Colin Herd, MD shall be mutually arranged with TLC and shall be no
less that 4 half days (where a half day is 4 hours) per month, per
laser system, on average throughout each calendar year. If
additional or extraordinary use of these lasers (that have been
financed with Colin Herd, (MD) is requested by Colin Herd, MD, and
is made available by TLC, then a charge equal to 50% of the charge
TLC has for that particular laser shall be paid to TLC. After the
5 year period, Colin Herd, MD shall continue to have TLC lasers
provided under the terms of this paragraph provided he continues to
hold 25% of PLS shares he shall receive herein and as adjusted
herein. Also, so long as he continues to hold 25% of PLS shares he
shall receive herein and as adjusted herein, Colin Herd, MD shall
have access to lasers of other mobile laser companies which are
subsidiaries of PLS if he were to have a medical practice within
the service area of any such subsidiaries. The terms of such laser
rental will be that laser charges shall be at 50% of the usual and
customary charge or the lowest rate charged to any client,
whichever is less. Further, if Colin Herd, MD provides additional
professional service or consultation to TLC or PLS (for example, by
teaching) then compensation for these services shall be mutually
agreed upon.
F. PLS shall use its best efforts in providing working capital to
TLC as provided in the Base Period's Compilation.
G. Closing shall take place within 30 days of the acceptance by
PLS of the compilation referred to paragraph B(1).
H. This letter is not intended to be a binding contract. Rather,
this letter is subject to the conditions set forth above, which
shall constitute conditions precedent to the formation of a
contract between PLS and Shareholder. Neither this letter of
intent nor any other written or verbal expression of intent by PLS
shall be binding unless and until a contract is executed between
PLS and Shareholder and all other conditions set forth above have
been met and satisfied.
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<ARTICLE> 5
<S> <C>
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