<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K/A
AMENDMENT NO. 1
AMENDMENT TO APPLICATION OR REPORT
PURSUANT TO SECTION 13 OR 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): March 12, 1998
INTEGRATED ORTHOPAEDICS, INC.
-----------------------------
(Exact name of registrant as specified in its charter)
TEXAS
-----
(State or other jurisdiction of incorporation)
1-10677 76-0203483
------- ----------
(Commission File Number) (I.R.S. Employer
Identification No.)
5858 Westheimer, Suite 500
Houston, Texas 77057
---------------------
(Address of principal executive office,
including zip code)
Registrant's telephone number, including area code: (713) 225-5464
___________________________________________________________
(former name or former address, if changed since last report)
This document consists of 17 pages.
--
<PAGE>
The undersigned registrant hereby amends the following items, financial
statements, exhibits or other provisions of its Current Report on Form 8-K dated
March 12, 1998, (Commission File Number 1-10677), as set forth below:
Item 7 Financial Statements and Exhibits Page
(a) Financial statements of business acquired
Longmont Orthopedic & Sports Medicine Clinic, PC
Report of Independent Accountants 8
Balance Sheets as of December 31, 1997 (audited) and
December 31, 1996 (audited) 9
Statement of Operations for the years ended
December 31, 1997 (audited) and December 31,
1996 (audited) 10
Statement of Stockholders' Equity for the years ended
December 31, 1997 (audited) and December 31,
1996 (audited) 11
Statement of Cash Flows for the years ended
December 31, 1997 (audited) and December 31, 1996 (audited) 12
Notes to Financial Statements 13
(b) Pro Forma financial information
Introduction 3
Unaudited Pro Forma Balance Sheet as of December 31, 1997 4
Unaudited Pro Forma Statement of Operations for the
Year Ended December 31, 1997 5
Unaudited Pro Forma Statement of
Operations for the Year Ended December 31, 1996 6
Notes to Unaudited Pro Forma Financial Statements 7
2
<PAGE>
INTRODUCTION
On March 12, 1998, Integrated Orthopaedics, Inc. acquired (i) the accounts
receivable and (ii) 100% of the outstanding capital stock of Longmont Orthopedic
& Sports Medicine Clinic, P.C. ("LOSMC"). At the time of the transaction, LOSMC
entered into a long-term management services agreement with the medical practice
conducted by Front Range Orthopedic Center, P.C., ("FROC"), a six-physician
orthopaedic medicine practice located in Longmont, Colorado. The Company
delivered aggregate consideration of approximately $4,572,000, including (i)
cash and estimated transaction costs of approximately $3,815,000 and (ii)
139,693 shares of the Company's common stock, and (iii) a commitment to deliver
30,001 shares of the Company's common stock on March 11, 2003. In connection
with the transaction, the Company also agreed to undertake operating leases
covering the facilities from which LOSMC had historically rendered its medical
services. The use of these facilities will be provided to FROC pursuant to the
Company's obligations under the management agreement. The purchase price was
determined after arms-length negotiations between the Company and the physician
owners of LOSMC. The cash portion of the transaction was funded from the
Company's existing cash reserves.
The following Unaudited Pro Forma Consolidated Balance Sheet as of December
31, 1997 and the Unaudited Pro Forma Consolidated Statement of Operations for
the years ended December 31, 1997 and December 31, 1996 have been prepared to
reflect adjustments to the Company's historical financial position and results
of operations to give effect to the Longmont Orthopedic & Sports Medicine
Clinic, PC transaction (the "Front Range Transaction" or the "Reported
Transaction").
The Unaudited Pro Forma consolidated Balance Sheet has been prepared as if
the Front Range Transaction occurred on December 31, 1997.
The Unaudited Pro Forma Consolidated Statement of Operations for the years
ended December 31, 1997 and December 31, 1996 have been prepared as if the Front
Range Transaction occurred on January 1, 1997 and January 1, 1996, respectively.
The pro forma financial statements have been prepared by the Company based
on the Company's audited and LOSMC's audited financial statements as of and for
the years ended December 31, 1997 and December 31, 1996. For purposes of
preparing the pro forma financial statements, the Company has estimated revenues
for the periods prior to the Company's acquisition of LOSMC by applying the
management fee formula contained in the management services agreement with FROC
to the historical medical practice revenue. These pro forma financial
statements are presented for illustrative purposes only and are not necessarily
indicative of the results that would have been obtained had the Front Range
Transaction been completed at the time above. This information should be read
in conjunction with the Company's and LOSMC's historical financial statements.
3
<PAGE>
INTEGRATED ORTHOPAEDICS, INC.
PRO FORMA BALANCE SHEET (UNAUDITED)
DECEMBER 31, 1997
(in 000'S)
<TABLE>
<CAPTION>
HISTORICAL (1) HISTORICAL (2) PRO FORMA
-------------- ------------- --------------------------
INTEGRATED REPORTED
ORTHOPAEDICS, REPORTED TRANSACTION AS
INC. TRANSACTION ADJUSTMENTS ADJUSTED
------------- ------------ ----------- --------
<S> <C> <C> <C> <C>
CURRENT ASSETS $ 16,642 $ 2 $(3,664) (3) $ 12,980
Cash and Equivalents 2,956 787 (53) (4) 3,690
Accounts Receivable, net 759 - 759
Income Tax Receivable 67 - 67
Due From Affiliated Medical Groups 152 - 152
Notes Receivable, net 753 9 18 (4) 780
Deferred Income Tax Asset 18 - - 18
-------- ---- ------- --------
TOTAL CURRENT ASSETS 21,347 798 (3,699) 18,446
Property and Equipment, net 1,529 201 15 (4) 1,745
Other Assets 258 - - 258
Management Services Agreement, net 25,018 - 5,801 (5) 30,819
-------- ---- ------- --------
TOTAL ASSETS $ 48,152 $999 $ 2,117 $ 51,268
======== ==== ======= ========
CURRENT LIABILITIES
Accounts Payable $ 565 $ 22 $ (22) (4) $ 565
Accrued Liabilities 3,022 - 155 (6) 3,177
Due to Affiliated Medical Groups 133 - - 133
Deferred Income Tax Liability - 231 (231) (4) -
Current Obligations Under Capital Lease 87 - - 87
Current Portion of Notes Payable 1,531 113 (113) (4) 1,531
-------- ---- ------- --------
TOTAL CURRENT LIABILITIES 5,338 366 (211) 5,493
Notes Payable 1,253 - - 1,253
Obligations Under Capital Leases 266 - - 266
Deferred Income Tax Liability Long-Term 7,873 - 2,204 (5) 10,077
-------- ---- ------- --------
TOTAL LIABILITIES 14,730 366 1,993 17,089
-------- ---- ------- --------
STOCKHOLDERS' EQUITY
Preferred Stock 3 - - 3
Common Stock 6 6 (6) (7) 6
Additional Paid-In Capital 41,803 73 606 (7)(8) 42,482
Common Stock To Be Issued 1,643 - 78 (9) 1,721
Accumulated Deficit (10,033) 554 (554) (7) (10,033)
-------- ---- ------- --------
Total Stockholders' Equity 33,422 633 124 34,179
-------- ---- ------- --------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 48,152 $999 $ 2,117 $ 51,268
======== ==== ======= ========
</TABLE>
4
<PAGE>
INTEGRATED ORTHOPAEDICS, INC.
PRO FORMA STATEMENT OF OPERATIONS (UNAUDITED)
FOR THE YEAR ENDED DECEMBER 31, 1997
(IN 000'S, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
HISTORICAL (1) HISTORICAL (2) PRO FORMA
-------------- ------------- --------------------------
INTEGRATED REPORTED
ORTHOPAEDICS, REPORTED TRANSACTION AS
INC. TRANSACTION ADJUSTMENTS ADJUSTED
------------- ------------ ----------- --------
<S> <C> <C> <C> <C>
Revenues $ 5,715 $ 3,418 $(1,492) (10) $ 7,641
-------- ------- ------- --------
Cost and Expenses:
Compensation costs and medical services 2,597 2,727 (2,131) (11) 3,193
Other direct costs 1,666 145 542 (12) 2,353
General and administrative 5,678 542 (542) (12) 5,678
Depreciation and amortization 309 99 145 (13) 553
Gain from divestiture and
discontinued operations 9 - - 9
-------- ------- ------- --------
10,259 3,513 (1,986) 11,786
Income from Operations (4,544) (95) 494 (4,145)
Interest Income 328 3 (3) (14) 328
Interest Expense (89) - - (89)
-------- ------- ------- --------
Loss Before Income Taxes (4,305) (92) 491 (3,906)
Income Tax Benefit 864 36 (36) (15) 864
-------- ------- ------- --------
Net Loss $ (3,441) $ (56) $ 455 $ (3,042)
======== ======= ======= ========
Loss Per Share $ (2.43) $ (2.29)
======== ========
Weighted Average Shares Outstanding 5,381 5,551
======== ========
</TABLE>
5
<PAGE>
INTEGRATED ORTHOPAEDICS, INC.
PRO FORMA STATEMENT OF OPERATIONS (UNAUDITED)
FOR THE YEAR ENDED DECEMBER 31, 1996
(IN 000'S, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
HISTORICAL (1) HISTORICAL (2) PRO FORMA
-------------- ------------- --------------------------
INTEGRATED REPORTED
ORTHOPAEDICS, REPORTED TRANSACTION AS
INC. TRANSACTION ADJUSTMENTS ADJUSTED
------------- ------------ ----------- --------
<S> <C> <C> <C> <C>
Revenues $ 9,835 $ 3,105 $(1,357) (10) $ 11,583
-------- ------- ------- --------
Cost and Expenses:
Compensation costs and medical services 4,410 2,439 (1,938) (11) 4,911
Other direct costs 3,808 127 423 (12) 4,358
General and administrative 2,613 423 (423) (12) 2,613
Depreciation and amortization 791 59 145 (13) 995
Gain from divestiture and
discontinued operations (3,168) - - (3,168)
-------- ------- ------- --------
8,454 3,048 (1,793) 9,709
-------- ------- ------- --------
Income from Operations 1,381 57 436 1,874
Interest Income - 10 (10) (14) -
Interest Expense (170) - - (170)
-------- ------- ------- --------
Earnings Before Income Taxes 1,211 67 426 1,704
Provision For Income Tax (424) (27) (105) (15) (556)
-------- ------- ------- --------
Net Income $ 787 $ 40 $ 321 $ 1,148
======== ======= ======= ========
Earnings Per Share $ 0.12 $ 0.19
======== ========
Weighted Average Shares Outstanding 5,286 5,456
======== ========
</TABLE>
6
<PAGE>
INTEGRATED ORTHOPAEDICS, INC.
NOTES TO UNAUDITED PRO FORMA FINANCIAL STATEMENTS
(1) Columns reflect December 31, 1997 and 1996 audited historical financial
information of Integrated Orthopaedics, Inc. ("IOI").
(2) Columns reflect December 31, 1997 and 1996 audited historical financial
information of Longmont Orthopedic and Sports Medicine Clinic, P.C. ("Front
Range").
(3) Adjustment to reflect payment of cash consideration of $3,602,800,
transaction costs of $59,021 and $2,486 of cash retained by the Front Range
physicians.
(4) Adjustment to reflect changes in working capital and property and equipment
between audited financial statements and transaction dates or to eliminate
assets not acquired and liabilities not assumed in the Front Range
transaction.
(5) Adjustment to reflect the cost and tax effect of the Front Range management
services agreement. The Company does not expect this estimate to change
materially when the Company completes its valuations of acquired assets and
assumed liabilities.
(6 Adjustment to reflect $135,000 of accrued transaction costs and $20,000 of
other miscellaneous accrued items.
(7) Adjustment to eliminate the historical ownership interest of Front Range.
(8) Adjustment to reflect the issuance of 139,693 shares of Common Stock to
Front Range affiliated physicians.
(9) Adjustment to reflect 30,001 shares to be issued to Front Range affiliated
physicians in 2003.
(10) Adjustment to eliminate medical practice revenues of Front Range that would
not constitute revenue to the Company pursuant to the management services
agreement.
(11) Adjustment to eliminate Front Range physician compensation that would not
constitute expense to the Company pursuant to the management services
agreement.
(12) Adjustment to reclassify general and administrative expenses of Front Range
to Other Direct Costs pursuant to the management services agreement.
(13) Adjustment to reflect additional amortization attributable to the newly
obtained management services agreements over its contractual term of 40
years.
(14) Adjustment to eliminate interest income earned by Front Range.
(15) Adjustment to reflect the tax (provision)/benefit of the Front Range
transaction on pro forma adjustment amounts.
7
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors and Stockholders of
Longmont Orthopedic and Sports Medicine Clinic, P.C.
In our opinion, the accompanying balance sheet and the related statements of
operations, stockholders' equity and of cash flows present fairly, in all
material respects, the financial position of Longmont Orthopedic and Sports
Medicine Clinic, P.C. at December 31, 1997 and 1996, and the results of its
operations and its cash flows for the years then ended in conformity with
generally accepted accounting principles. 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 of these statements in accordance with generally accepted auditing
standards which require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements, assessing the
accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for the opinion expressed above.
PRICE WATERHOUSE LLP
Houston, Texas
April 28, 1998
8
<PAGE>
LONGMONT ORTHOPEDIC AND SPORTS MEDICINE CLINIC, P.C.
BALANCE SHEET
DECEMBER 31, 1997 AND 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
1997 1996
ASSETS
<S> <C> <C>
Cash and equivalents $ 2,486 $ 101,920
Accounts receivable, net of allowances of
$61,859 and $74,709 787,131 749,345
Other assets 9,067 9,267
---------- -----------
Total current assets 798,684 860,532
---------- -----------
Property and equipment:
Equipment, furniture and fixtures 566,707 551,614
Leasehold improvements 66,413 64,688
Less - accumulated depreciation and amortization (432,404) (333,082)
---------- -----------
200,716 283,220
---------- -----------
Total assets $ 999,400 $ 1,143,752
========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable and accrued expenses $ 21,910 $ 26,290
Short-term debt 113,000 160,500
Deferred income tax liability 231,174 267,214
---------- -----------
Total current liabilities 366,084 454,004
---------- -----------
Stockholders' equity:
Common stock - $1 par value; 6,000 shares
authorized, 6,000 shares issued and outstanding 6,000 6,000
Additional paid in capital 73,000 73,000
Retained earnings 554,316 610,748
---------- -----------
Total stockholders' equity 633,316 689,748
---------- -----------
Total liabilities and stockholders' equity $ 999,400 $ 1,143,752
========== ===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
9
<PAGE>
LONGMONT ORTHOPEDIC AND SPORTS MEDICINE CLINIC, P.C.
STATEMENT OF OPERATIONS
YEARS ENDED DECEMBER 31, 1997 AND 1996
- --------------------------------------------------------------------------------
1997 1996
Revenues $ 3,417,750 $ 3,105,332
----------- ------------
Costs and expenses:
Compensation costs and medical services 2,726,553 2,439,084
Other direct costs 145,523 127,357
Selling, general and administrative 541,716 422,863
Depreciation and amortization 99,322 58,988
----------- ------------
3,513,114 3,048,292
----------- ------------
(Loss) income from operations (95,364) 57,040
Interest and other income 2,892 10,703
----------- ------------
(Loss) income before income taxes (92,472) 67,743
Income tax benefit (expense) 36,040 (27,479)
----------- ------------
Net (loss) income $ (56,432) $ 40,264
=========== ============
The accompanying notes are an integral part of these financial statements.
10
<PAGE>
LONGMONT ORTHOPEDIC AND SPORTS MEDICINE CLINIC, P.C.
STATEMENT OF STOCKHOLDERS' EQUITY
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
COMMON STOCK ADDITIONAL
------------------- PAID-IN RETAINED
SHARES AMOUNT CAPITAL EARNINGS TOTAL
<S> <C> <C> <C> <C> <C>
Balance at December 31, 1995 4,000 $ 4,000 $570,484 $574,484
Issuance of common stock 2,000 2,000 $ 73,000 75,000
Net income 40,264 40,264
------ ------- -------- -------- --------
Balance at December 31, 1996 6,000 6,000 73,000 610,748 689,748
Net loss (56,432) (56,432)
------ ------- -------- -------- --------
Balance at December 31, 1997 6,000 $ 6,000 $ 73,000 $554,316 $633,316
------ ------- -------- -------- --------
</TABLE>
The accompanying notes are an integral part of these financial statements.
11
<PAGE>
LONGMONT ORTHOPEDIC AND SPORTS MEDICINE CLINIC, P.C.
STATEMENT OF CASH FLOWS
YEARS ENDED DECEMBER 31, 1997 AND 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
1997 1996
<S> <C> <C>
Cash flows from operating activities:-
Net (loss) income $ (56,432) $ 40,264
Adjustments to reconcile net (loss) income to net cash
provided by operating activities:
Depreciation and amortization 99,322 58,988
Deferred tax (benefit) expense (36,040) 27,479
Changes in assets and liabilities:
Accounts receivable (37,786) (41,233)
Other assets 200 3,500
Accounts payable and accrued expenses (4,380) 6,387
--------- ---------
Net cash (used) provided by operating activities (35,116) 95,385
--------- ---------
Cash flows from investing activities:
Purchase of property and equipment (16,818) (260,814)
--------- ---------
Net cash used by investing activities (16,818) (260,814)
--------- ---------
Cash flows from financing activities:
Proceeds from line of credit 113,000 160,500
Principal payments on line of credit (160,500)
Sales of common stock 75,000
--------- ---------
Net cash (used) provided by financing activities (47,500) 235,500
--------- ---------
Net change in cash and equivalents (99,434) 70,071
Cash and equivalents:
Beginning of year 101,920 31,849
--------- ---------
End of year $ 2,486 $ 101,920
========= =========
Supplemental disclosures:
Interest paid $ 4,404 $ 10,112
========= =========
</TABLE>
The accompanying notes are an integral part of these financial statements.
12
<PAGE>
LONGMONT ORTHOPEDIC AND SPORTS MEDICINE CLINIC, P.C.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1997 AND 1996
1. BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Longmont Orthopedic and Sports Medicine Clinic, P.C. (the Company), a
Colorado professional service corporation, is a physician-owned group
practice serving the Longmont, Colorado, area. The Company is currently
doing business as Front Range Orthopedic Center of Longmont, P.C. The
Company was formed on April 25, 1994 for the purpose of rendering
professional orthopedic and orthopedic-related services, and occupational
and physical rehabilitation.
The following is a summary of the Company's significant accounting
policies:
USE OF ESTIMATES
The preparation of the Company's financial statements in conformity with
generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of assets,
liabilities, revenues and expenses, as well as disclosures of contingent
assets and liabilities. Because of inherent uncertainties in this process,
actual future results could differ from those expected at the reporting
date.
REVENUE RECOGNITION
Revenues for services rendered to patients by the Company are recognized
when the services are provided based on established charges reduced to the
net amounts estimated to be collectible for patients covered under
contractual programs and by allowance for doubtful accounts.
PROPERTY AND EQUIPMENT
Property and equipment is stated at cost. Depreciation of equipment,
furniture and fixtures is provided using the straight-line method over the
estimated useful lives of the respective assets of five to seven years.
Leasehold improvements are depreciated over the lease term.
INCOME TAXES
Income taxes are recognized based on the liability method. Deferred income
tax assets or liabilities are recorded based upon temporary differences
between the tax basis of assets and liabilities and their carrying values
for financial reporting purposes. Deferred income tax expense or benefit is
the result of changes in the deferred income tax assets and liabilities
during the period.
CASH AND EQUIVALENTS
For purposes of reporting cash flows, the Company considers short-term
marketable securities with an original maturity date of three months or
less to be cash equivalents.
2. DEBT
The Company has an available line of credit with a maximum borrowing limit
of $500,000. The line of credit bears interest on outstanding balances at
the prime rate plus 1% and is unsecured. This rate approximates 9.5% for
1997 and 9.25% for 1996. There was no balance outstanding at April 28,
1998.
13
<PAGE>
LONGMONT ORTHOPEDIC AND SPORTS MEDICINE CLINIC, P.C.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1997 AND 1996
3. INCOME TAXES
The Company's income tax benefit (expense), all of which is deferred,
consists of the following:
YEAR ENDED
DECEMBER 31,
-----------------------------
1997 1996
Federal $ 31,535 $ (24,044)
State 4,505 (3,435)
--------- ---------
$ 36,040 $ (27,479)
========= =========
Deferred income tax assets (liabilities) are comprised of the following:
YEAR ENDED
DECEMBER 31,
-----------------------------
1997 1996
Cash basis of accounting:
Accounts receivable $ (314,852) $(299,738)
Accounts payable and accrued liabilities 8,900 10,497
Operating loss carryforward 74,778 22,027
---------- ---------
$ (231,174) $(267,214)
========== =========
At December 31, 1997, the Company has a net operating loss of $213,000
available for federal income tax purposes which expires in 2010 to 2012.
As a professional service corporation, the Company is taxed at a federal
rate of 35% and state rate of 5%. Also, the Company generally pays owners'
bonuses and other compensation to the extent of available taxable income.
The difference between the effective income tax rate and the amount which
would be determined by applying the statutory U.S. income tax rate to
income before income taxes is as follows for the period ended:
14
<PAGE>
LONGMONT ORTHOPEDIC AND SPORTS MEDICINE CLINIC, P.C.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1997 AND 1996
YEAR ENDED
DECEMBER 31,
1997 1996
Benefit from (provision for) income taxes at U.S.
statutory rates 35.0% (35.0)%
State income taxes 4.9 (5.1)
Nondeductible expenses and other (0.9) (0.5)
----- -------
39.0% (40.6)%
===== =======
4. EMPLOYEE BENEFIT PLAN
The Company has a profit sharing plan (the Plan) in which substantially all
employees are eligible to participate after completion of one year of
service, as defined by the Plan's agreement. Contributions to the Plan are
discretionary and are determined by the Company on an annual basis.
Employees vest in the Company's contributions over seven years and
stockholders of the Company are the trustees of the Plan. Company
contributions to the Plan for the years ended December 31, 1997 and 1996
were approximately $118,800 and $89,907, respectively.
5. LEASE COMMITMENTS
At December 31, 1997, future minimum payments under noncancelable operating
lease obligations for various property and equipment were as follows:
1997 $ 107,180
1998 107,180
1999 17,864
---------
Total minimum lease payments $ 232,224
=========
Rental expense under noncancelable and month-to-month operating leases was
$123,930 in 1997 and $60,348 in 1996.
6. COMMITMENTS AND CONTINGENCIES AND RELATED PARTIES
The Company maintains insurance with respect to medical malpractice risks
on a claims-made basis in amounts management believes to be adequate.
Management is not aware of any outstanding claims which would exceed
insurance coverage or would have a material impact on the Company's
financial position or results of operations upon resolution.
The Company uses professional services from an individual related to one of
the physician owners. Fees related to these services were $13,400 and
$16,896 in 1997 and 1996, respectively.
15
<PAGE>
LONGMONT ORTHOPEDIC AND SPORTS MEDICINE CLINIC, P.C.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1997 AND 1996
7. SUBSEQUENT EVENTS
The Company has entered into a letter of agreement on August 29, 1997 to
transfer its medical assets and the sale of substantially all of its
accounts receivable. The physicians are also negotiating an agreement
whereby the purchaser will manage the physicians' medical practice on a
long-term basis.
16
<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.
INTEGRATED ORTHOPAEDICS, INC.
(Registrant)
Date: May 26, 1998 By /s/ Ronald E. Pierce
---------------------
Ronald E. Pierce
President
By /s/ Jefferson R. Casey
-----------------------
Jefferson R. Casey
Senior Vice President, Treasurer &
Secretary (Principal Financial &
Accounting Officer)
17