UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
--------------------
FORM 8-K/A
(Amendment No. 1)
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported) November 13, 2000
-----------------
Park Pharmacy Corporation
-----------------------------------------------------------------
(Exact Name of Registrant as Specified in Charter)
Colorado 000-15379 84-1029701
----------------------------------------------------------------
(State or Other (Commission (IRS Employer
Jurisdiction File Number) Identification
of Incorporation) No.)
10711 Preston Road, Suite 250, 75230
Dallas, Texas
----------------------------------------------------------------
(Address of Principal Executive (Zip Code)
Offices)
Registrant's telephone number, including area code (214) 692-9921
--------------
N/A
-----------------------------------------------------------------
(Former Name or Former Address, if Changes Since Last Report)
<PAGE>
The undersigned registrant hereby amends the following Item
7. Financial Statements and Exhibits of its Current Report on
Form 8-K dated November 13, 2000 include the following:
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(a) The following Financial Statements of Business Acquired
are annexed hereto:
Balance Sheet at June 30, 2000
Statements of Income and Retained Earnings for the Years
Ended June 30, 1999 and 2000
Statements of Cash Flows for the Years Ended June 30,
1999 and 2000
(b) The following Pro Forma Financial Information is annexed
hereto:
Unaudited Pro Forma Combined Balance Sheet as of June
30, 2000
Unaudited Pro Forma Statement of Operations for the Year
Ended June 30, 2000
(c) Exhibits
Exhibit No. Description
2.1* Agreement and Plan of Merger dated November
10, 2000 by and among Park, MJN Acquisition
Corp., MJN and Nault.
* Previously filed.
2
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned hereunto duly authorized.
PARK PHARMACY CORPORATION
(Registrant)
Date: January __, 2001 By: /s/ Thomas R. Baker
------------------------
Thomas R. Baker
Chief Executive Officer &
President
3
<PAGE>
Index to Financial Statements
Independent Auditors Report F-2
Balance Sheet at June 30, 2000 F-3
Statements of Income and Retained Earnings
for the Years Ended June 30, 1999 and 2000 F-4
Statements of Cash Flows for the Years Ended
June 30, 1999 and 2000 F-5
Notes to Financial Statements F-6
Unaudited Pro Forma Combined Balance Sheet as of
June 30, 2000 F-10
Unaudited Pro Forma Combined Statement of Operations
for the Year Ended June 30, 2000 F-11
F-1
<PAGE>
INDEPENDENT AUDITOR'S REPORT
To the Stockholder
MJN Enterprises, Inc.
Arlington, Texas
We have audited the accompanying balance sheet of MJN
Enterprises, Inc., d/b/a Total Health Care, as of June 30, 2000,
and the related statements of income and retained earnings, and
cash flows for each of the two years then ended. These financial
statements are the responsibility of the Company's management.
Our responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with generally
accepted auditing standards. Those standards require that we
plan and perform the audits to obtain reasonable assurance about
whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as
well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above
present fairly, in all material respects, the financial position
of MJN Enterprises, Inc. as of June 30, 2000, and the results of
its operations and its cash flows for each of the two years then
ended in conformity with generally accepted accounting
principles.
Hein + Associates llp
October 11, 2000
Dallas, Texas
F-2
<PAGE>
MJN ENTERPRISES, INC.
d/b/a TOTAL HEALTH CARE
BALANCE SHEET
JUNE 30, 2000
ASSETS
------
CURRENT ASSETS:
Trade accounts receivable, net of allowance
for doubtful accounts of $127,600 $ 898,573
Other receivables 1,000
Inventory 233,450
Prepaid expenses 23,888
----------
Total current assets 1,156,911
PROPERTY AND EQUIPMENT, net 55,995
OTHER ASSETS 17,792
----------
Total assets $ 1,230,698
==========
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
CURRENT LIABILITIES:
Current portion of notes payable and long-
term debt $ 136,918
Accounts payable and accrued expenses 285,696
----------
Total current liabilities 422,614
LONG-TERM DEBT 218,440
COMMITMENT AND CONTINGENCY (Note 5)
STOCKHOLDER'S EQUITY:
Common stock, $1.00 par value; 1,000,000
shares authorized; 1,000 shares issued and
outstanding 1,000
Additional paid-in capital 1,500
Retained earnings 587,144
----------
Total stockholder's equity 589,644
----------
Total liabilities and
stockholder's equity $ 1,230,698
=========
See accompanying notes to these financial statements.
F-3
<PAGE>
MJN ENTERPRISES, INC.
d/b/a TOTAL HEALTH CARE
STATEMENTS OF INCOME AND RETAINED EARNINGS
Years Ended June 30,
-----------------------
2000 1999
----------- -----------
SALES $ 6,120,160 $4,778,076
COST OF GOODS SOLD 3,490,971 2,874,712
---------- ----------
Gross profit 2,629,189 1,903,364
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES
2,279,308 1,524,055
DEPRECIATION EXPENSE 28,112 30,186
---------- ----------
Operating income 321,769 349,123
INTEREST EXPENSE 46,099 27,193
---------- ----------
INCOME BEFORE STATE INCOME TAX 275,670 321,930
PROVISION FOR STATE INCOME TAX 19,500 14,500
---------- ----------
NET INCOME 256,170 307,430
RETAINED EARNINGS, beginning of year 521,974 416,544
Distributions to stockholder (191,000) (202,000)
---------- ----------
RETAINED EARNINGS, end of year $ 587,144 $ 521,974
========== ==========
See accompanying notes to these financial statements.
F-4
<PAGE>
MJN ENTERPRISES, INC.
d/b/a TOTAL HEALTH CARE
STATEMENTS OF CASH FLOWS
Years Ended June 30,
-----------------------
2000 1999
--------- ----------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 256,170 $307,430
Adjustments to reconcile net income to
net cash provided by operating
activities:
Depreciation expense 28,112 30,186
Change in assets and liabilities:
Trade accounts receivable (184,069) (437,444)
Other receivables 5,736 2,558
Inventory 11,750 (28,086)
Prepaid expenses 3,067 (13,424)
Other assets 859 (14,218)
Accounts payable and accrued
expenses 215,338 418,882
-------- --------
Net cash provided by operating
activities 336,963 265,884
CASH FLOWS FROM INVESTING ACTIVITIES -
Purchases of property and equipment (5,684) (18,055)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from notes payable and long-term
debt - 62,475
Principal payments on notes payable and
long-term debt (145,967) (111,364)
Distributions to stockholder (191,000) (202,000)
-------- --------
Net cash used in financing
activities (336,967) (250,889)
-------- --------
NET DECREASE IN CASH (5,688) (3,060)
CASH, beginning of year 5,688 8,748
--------- --------
CASH, end of year $ - $ 5,688
========= ========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW
INFORMATION:
Interest paid $ 46,100 $ 27,200
========= ========
State income taxes paid $ - $ 5,900
========= ========
NON-CASH INVESTING AND FINANCING TRANSACTIONS:
Accounts payable converted to
promissory notes $ 100,000 $379,370
Promissory note issued in connection
with purchase of equipment - 32,500
See accompanying notes to these financial statements.
F-5
<PAGE>
MJN ENTERPRISES, INC.
d/b/a TOTAL HEALTH CARE
NOTES TO FINANCIAL STATEMENTS
1. Summary of Significant Accounting Policies
------------------------------------------
Nature of Operations
--------------------
MJN Enterprises, Inc., d/b/a Total Health Care ("the
Company"), was established in 1995 and operates an
institutional pharmacy that distributes medications
generally sold by prescription, for residents in hospices,
nursing homes and other healthcare institutions primarily
located in the Dallas/Fort Worth, Texas metropolitan area.
Inventory
---------
Inventory consists of finished goods held for resale and is
valued at the lower of cost or market. Cost is determined
by the first-in, first-out method.
Property and Equipment
----------------------
Property and equipment is stated at cost less accumulated
depreciation. Depreciation is computed using accelerated
methods over the estimated useful lives, generally five to
seven years, of the underlying assets. Leasehold
improvements are amortized using the straight-line method
over the life of the related lease agreement. The costs of
repairs and maintenance are expensed as incurred.
Income Taxes
------------
The Company has elected to be taxed under the provisions of
Subchapter S of the Internal Revenue Code. Under such
provisions, the Company does not pay federal corporate
income taxes on its taxable income. Instead, the
stockholder is liable for individual federal income taxes on
the Company's taxable income. The Company remains liable
for state income taxes.
Revenue Recognition and Concentration of Credit Risk
----------------------------------------------------
The Company recognizes revenue when sales transactions occur
and product is delivered to the customer. Revenue is
reported at the estimated net realizable amounts expected to
be received from individuals, third party payers,
institutional healthcare providers and others. A portion of
the Company's sales is derived from various state and
federal medical assistance programs that are affected by
changes in payment criteria and are subject to legislative
actions.
Net Revenues from Medicaid and Medicare programs,
collectively, accounted for 20% and 27% of the Company's
total revenues for the years ended June 30, 2000 and 1999,
respectively. Accounts receivable from Medicaid and
Medicare programs were approximately 7% and 4%,
respectively, of total accounts receivable at June 30, 2000.
Sales to a single hospice customer accounted for 28% and 17%
of the Company's total revenues for the years ended June 30,
2000 and 1999, respectively. Management does not believe
the loss of this customer would have a negative impact on
the Company's operations.
At June 30, 2000, amounts due from four of the Company's
hospice customers and a single insurance company accounted
for 63% and 13%, respectively, of total accounts receivable.
No other customer or party accounted for more than 10% of
accounts receivable. Management believes if any one or a
group of these receivable balances should be deemed
uncollectible, it would have a material adverse impact on
the Company's operations and financial condition.
F-6
<PAGE>
The Company does not generally require collateral in
connection with credit sales, but performs periodic
evaluations of its customers' creditworthiness and believes
the allowance for doubtful accounts is adequate.
Use of Estimates
----------------
The preparation of the Company's financial statements in
conformity with generally accepted accounting principles
requires the Company's management to make estimates and
assumptions that affect the amounts reported in these
financial statements and accompanying notes. Actual results
could differ from those estimates and the differences could
be material. The most significant estimate in the
accompanying financial statements is the allowance for
doubtful accounts receivable.
2. Property and Equipment
----------------------
Property and equipment consisted of the following at June
30, 2000:
Fixtures and equipment $ 83,378
Office furniture 6,801
Vehicle 44,520
Leasehold improvements 11,386
---------
146,085
Less accumulated depreciation (90,090)
---------
$ 55,995
=========
3. Accounts Payable and Accrued Expenses
-------------------------------------
Accounts payable and accrued expenses consisted of the
following at June 30, 2000:
Trade accounts payable $ 207,210
Accrued payroll and related taxes 47,143
Accrued state income taxes 29,500
Other 1,843
-----------
$ 285,696
===========
4. Debt
----
Notes payable and long-term debt consisted of the following
at June 30, 2000:
Note payable to a bank, interest at
prime plus 2.25% (total of 11.75%),
due in monthly principal and interest
payments of $7,550, remaining unpaid
principal and accrued interest due
October 2003, collateralized by the
Company's accounts receivable and
inventory. The note is guaranteed by
the Company's stockholder.
$ 251,010
Unsecured loan payable to a supplier,
interest at 10% due in monthly
principal payments of $5,556 until
fully paid. 100,000
F-7
<PAGE>
Note payable collateralized by a
vehicle, interest at 8.15%, due in 4,348
monthly principal and interest ---------
payments of $1,141, maturing in
October 2000.
Total notes payable and long- 355,358
term debt
Less current portion (136,918)
--------
$ 218,440
========
Aggregate maturities of long-term debt obligations at June 30,
2000 are as follows:
Years Ending June 30,
---------------------
2001 $ 136,918
2002 106,014
2003 81,702
2004 30,724
--------
$ 355,358
========
5. Commitments and Contingency
---------------------------
Leases
------
The Company leases pharmacy and general office space under a
lease agreement which expires in September 2002. Rental
expense under this operating lease was approximately $73,800
and $56,900 for the years ended June 30, 2000 and 1999,
respectively.
Future minimum rental payments under this non-cancellable
operating lease agreement are approximately:
Years Ending June 30,
---------------------
2001 $42,900
2002 10,300
-------
$53,200
=======
Litigation
----------
The Company is a defendant in a lawsuit alleging personal
injuries sustained in an automobile accident caused by an
employee of the Company. The plaintiff in this matter is
seeking damages for future medical expenses that they
estimate, at a minimum, to be approximately $321,000. A
tentative settlement has been reached, subject to court
approval, in which the Company's share of damages is
$75,000. The damages are fully covered by insurance.
Outside counsel for the Company has advised that if the
settlement is not concluded and the case goes to trial, an
educated estimate of the amount of damages a jury may award
would range from $90,000 to $140,000, excluding pre-judgment
interest and court costs. Damages in this range are covered
by an insurance policy with Allstate Insurance Company, and
no liability has been recorded for the litigation in the
financial statements.
6. Fair Value of Financial Instruments
-----------------------------------
The Company's financial instruments primarily consist of
accounts receivable, accounts payable and notes payable.
The carrying amounts of these financial instruments
approximate their fair values because of their short-term
nature, or in the case of the notes payable, because the
interest rates are similar to prevailing market rates of
interest.
7. Subsequent Event
----------------
On October 2, 2000, the Company's stockholder entered into a
letter of intent to sell all the outstanding shares of stock
to Park Pharmacy Corporation.
F-8
<PAGE>
Park Pharmacy Corporation
Unaudited Pro Forma Combined Financial Statements
The accompanying unaudited pro forma combined financial
statements have been prepared to reflect the acquisition of 100%
of the common stock of MJN Enterprises ("MJN") by Park Pharmacy
Corporation ("Park") on November 10, 2000 as if the acquisition
had occurred on June 30, 2000 with respect to the pro forma
balance sheet and as of the beginning of the year with respect to
the pro forma statement of operations. Park acquired MJN for
cash consideration of $1,150,000 and 1,450,000 shares of Park's
common stock. The pro forma statement of operations also
reflects the acquisitions of RX-Pro.Com, which occurred on
December 21, 1999, Dougherty's Pharmacy, Inc., which occurred on
December 30, 1999, Total Pharmacy Supply, Inc., which occurred on
March 31, 2000, and the ongoing operations of certain infusion
pharmacies purchased from Amedisys Alternate-Site Infusion
Therapy Services, Inc. ("AASI"), which occurred on August 10,
2000, as if these acquisitions had occurred at the beginning of
the year. These latter acquisitions were previously reported on
Forms 8-K filed by the Company and were disclosed in the Park
Form 10-KSB.
The accompanying unaudited pro forma financial statements should
be read in conjunction with the historical financial statements
of MJN included herein, the historical financial statements of
Park included in its most recent Forms 10-KSB and 10-QSB,
and the aforementioned Forms 8-K for the acquisitions of Rx-Pro.com,
Dougherty's, Total Pharmacy and AASI. The pro forma statement of
operations includes only the facilities of AASI that were acquired
by Park. AASI's year end is December 31, and the pro forma statement
of operations combines the statement of operations of AASI for the
six months ended June 30, 2000 and the six months ended December 31,
1999. The pro forma statement of operations includes the operations of
Rx-Pro, Dougherty's and Total Pharmacy Supply for the months
prior to their acquisition by Park. These pro forma financial
statements are not indicative of the financial position or
results of operations that would actually have occurred if the
transactions described above had occurred at the dates presented
or which may be obtained in the future.
F-9
<PAGE>
PARK PHARMACY CORPORATION AND MJN ENTERPRISES
UNAUDITED PRO FORMA COMBINED BALANCE SHEET
AS OF JUNE 30, 2000
<TABLE>
<CAPTION>
Amedisys
Alternate-
MJN Site Pro Forma Pro Forma
Park Enterprises Infusion Adjustments Balances
---------- ------------ ----------- ------------ ------------
<S> <C> <C> <C> <C> <C>
CURRENT ASSETS:
Cash $ 935,946 $ - $ 13,584 $ (13,584) (1) $ 935,946
Accounts receivable 2,982,657 898,573 2,270,328 (2,270,328) (1) 3,881,230
Inventories 1,911,705 233,450 188,301 - 2,333,456
Other 51,561 24,888 17,486 - 93,935
---------- --------- ---------- ---------- -----------
Total current
assets 5,881,869 1,156,911 2,489,699 (2,283,912) 7,244,567
SOFTWARE COSTS 2,269,265 - - - 2,269,265
FIXED ASSETS, net 877,670 55,995 315,297 - 1,248,962
GOODWILL 1,239,803 - 513,401 2,725,871 (3) 4,479,075
OTHER ASSETS 228,263 $ 17,792 - - 246,055
---------- ---------- ----------- ---------- ------------
Total assets $ 10,496,870 $1,230,698 $ 3,318,397 $ 441,959 $ 15,487,924
========== ========== =========== ========== ============
CURRENT LIABILITIES:
Accounts payable and
accrued liabilities $ 2,196,658 $ 285,696 $ 1,169,206 $(1,169,206) (1) $ 2,482,354
Due to related
parties - - 8,132,421 (8,132,421) (2) -
Income tax payable 98,400 - - - 98,400
Current portion of (1)
liabilities 66,602 136,918 49,673 (49,673) 203,520
---------- --------- ---------- ----------- -----------
Total current
liabilities 2,361,660 422,614 9,351,300 (9,351,300) 2,784,274
LONG-TERM LIABILITIES 2,096,239 218,440 2,900,000 (4) 5,214,679
-
STOCKHOLDERS' EQUITY
(DEFICIT)
Preferred stock 3,025 3,025
- - -
Common stock 451 1,000 1 (856) (5) 596
Other stockholders'
equity 6,035,495 588,644 (6,032,904) 6,894,115 (5) 7,485,350
---------- --------- ----------- ----------- -----------
Total
stockholders
equity 6,038,971 589,644 (6,032,903) 6,893,259 7,488,971
---------- --------- ----------- ----------- ----------
Total
liabilities and
stockholders'
equity $ 10,496,870 $ 1,230,698 $3,318,397 $ 441,959 $ 15,487,924
========== ========= ========== =========== ============
</TABLE>
(1) Adjustment to remove assets and liabilities associated with
operations within AASI that were not purchased
(2) Eliminate intercompany debt with Parent of AASI
(3) Adjustment to record goodwill for excess of purchase price over
net assets acquired for MJN and AASI of $2,010,356 and $715,515,
respectively
(4) Adjustment to reflect borrowing for cash purchase of MNJ and AASI
of $1,150,000 and $1,750,000,respectively
(5) Adjustment to record estimated value of stock issued to acquire
MJN and remove equity accounts of MJN and AASI
F-10
<PAGE>
PARK PHARMACY CORPORATION AND MJN ENTERPRISES
UNAUDITED PRO FORMA COMBINED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED JUNE 30, 2000
<TABLE>
<CAPTION>
(4)
Amedisys
Alternate-
MJN Total Site Pro Forma Pro Forma
Park Enterprises Pharmacy RX-Pro Dougherty's Infusion Adjustments Balances
----------- ----------- ---------- ----------- ----------- ---------- ----------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Sales $11,477,179 $6,120,160 $2,494,338 $ 89,179 $9,298,361 $6,213,142 $ - $35,692,359
Less cost of goods sold 7,473,575 3,490,971 1,726,588 - 6,082,717 3,200,476 - 21,974,327
------------ --------- ---------- ---------- --------- ---------- ---------- -----------
General and
administrative expenses 3,553,241 2,307,420 704,818 200,257 2,598,246 3,480,149 - 12,844,131
Amortization of
intangibles and goodwill 28,075 - - - - - 218,179 246,254
------------ --------- ---------- ---------- --------- ----------- ---------- -----------
Income (loss) from
operations 422,288 321,769 62,932 (111,078) 617,398 (467,483) (218,179) 627,647
Other income (expense) (147,784) (46,099) (27,588) (4,213) 6,787 (67,000) (272,500) (558,397)
------------ --------- ---------- ---------- --------- ----------- ---------- -----------
Income (loss) before
income taxes 274,504 275,670 35,344 (115,291) 624,185 (534,483) (490,679) 69,250
Provision for income
taxes 31,630 19,500 1,590 - 118,228 - (170,948) -
------------ --------- ---------- ---------- --------- ----------- ---------- -----------
Net income (loss) $ 242,874 $ 256,170 $ 33,754 $ (115,291) $ 505,957 $ (534,483) $ (319,731) $ 69,250
============ ========= ========= ========== ========= =========== ========== ==========
Net income (loss) per
share, basic and diluted $ 0.01 -
============ ==========
Weighted average shares 31,543,000 32,993,000
============ ==========
</TABLE>
Notes
(1) Adjustment to reflect amortization of goodwill recorded
in the acquisition of Rx-Pro over five years, and in the
acquisitions of Total Pharmacy, AASI and MJN each over
twenty years.
(2) Adjustment to decrease income taxes to amount that would
have occurred if the companies had been combined at the
beginning of the year
(3) Interest expense on the debt incurred from acquisitions
of MJN and AASI of $115,000 and $157,500, respectively
(4) Includes operations of acquired locations only
F-11
