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SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report: March 11, 1996
Date of Earliest Event Reported: November 10, 1995
MEDPLUS CORPORATION
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(Exact name of the registrant as specified in its charter)
DELAWARE 0-16286 95-1082020
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(State or other jurisdiction (commission (IRS Employer
of incorporation) File Number) Identification No.)
8 S. NEVADA AVENUE, SUITE 500, COLORADO SPRINGS, COLORADO 80903
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (719) 575-0044
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(Former name or former address, if changed since last report)
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Item 2. ACQUISITION OR DISPOSITION OF ASSETS
On November 10, 1995, MEDPLUS CORPORATION, (the Registrant), acquired 100%
interest in the assets of Surgical Funding Group, (SFG), located in Irvine,
California. The business of the Registrant is essentially similar to that of SFG
in that both entities market a non-recourse credit card to health care
providers. However, SFG provides their credit card to a provider base of plastic
surgeons nation wide with a strong presence in California. As a result of the
acquisition the registrant intends to increase its presence and provider base in
the plastic surgery market.
Under the terms of the acquisition SFG will retain its present marketing
facilities in California. Also under the agreement, P. James Voloshin, MD.,
SFG's President and founder, has accepted a nomination and been elected to serve
on the registrant's Board of Directors.
The consideration paid by the registrant for its acquisition of SFG was
657,035 shares of the registrant's common stock.
Item 7. FINANCIAL STATEMENTS
The acquisition of SFG by the Registrant is not believed by management to
be a significant transaction in relation to the financial statement requirements
of Item 7 of Form 8-K. Management is aware that the acquisition technically
would require audited financial statements of SFG to be filed as well as certain
pro forma financial information. However, management is of the opinion that the
time and costs incurred in auditing the financial statements and preparing pro
forma financial information would be excessive in relation to the benefits of
such information due to the de minimis value assigned to the assets which were
acquired. The acquired assets are valued at only $13,000 which includes the
assignment of $5,000 value to SFG's customer list. The amounts assigned to the
assets acquired, although de minimis, represent 19% of the combined assets of
the Registrant and SFG. The percentage is large due to the decline in amount of
the Registrant's net assets as a result of its weak financial condition. The
Registrant has given up 17% of the outstanding shares of the Company in exchange
for the assets.
Unaudited financial statements of SFG for the year ended June 30, 1995 are
included with this Form 8-K.
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SURGICAL FUNDING GROUP, INC.
BALANCE SHEET
(UNAUDITED)
JUNE 30, 1995
ASSETS
<TABLE>
<CAPTION>
<S> <C> <C>
CURRENT ASSETS
Cash $ 521
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TOTAL CURRENT ASSETS $ 521
FIXED ASSETS
Furniture & Fixtures 4,922
Office Equipment 8,643
Less: Accumulated Depreciation (6,137)
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NET FIXED ASSETS 7,428
OTHER ASSETS
Organization Costs 3,600
Less: Accumulated Amortization (2,040)
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TOTAL OTHER ASSETS 1,560
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TOTAL ASSETS $ 9,509
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<CAPTION>
LIABILITIES AND STOCKHOLDERS' EQUITY
<S> <C> <C>
CURRENT LIABILITIES
Accounts Payable $ 21,500
Accrued Liabilities 78,027
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TOTAL CURRENT LIABILITIES 99,527
LONG-TERM LIABILITIES 130,749
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TOTAL LONG-TERM LIABILITIES 130,749
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TOTAL LIABILITIES 230,276
STOCKHOLDERS' EQUITY
Common Stock (2,500,000 Shares
Authorized; 3,428 Shares Issued
and Outstanding) 25,100
Treasury Stock (8,000 Shares) (5,159)
Retained Earnings (240,708)
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TOTAL STOCKHOLDERS' EQUITY (220,767)
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TOTAL LIABILITIES & STOCKHOLDERS' EQUITY $ 9,519
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</TABLE>
See Accompanying Notes to Financial Statements
3
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SURGICAL FUNDING GROUP, INC.
STATEMENT OF INCOME AND EXPENSE
(UNAUDITED)
JULY 1, 1994 TO JUNE 30, 1995
<TABLE>
<CAPTION>
<S> <C>
REVENUE
Sales $ 123,466
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Total Revenue 123,466
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OPERATING EXPENSES
Salaries 114,874
Payroll Taxes 1,164
Commissions 24,902
Rent Expense 12,854
Depreciation & Amortization 5,196
Advertising 15,278
Accounting 275
Bank Fees 361
Miscellaneous 32
Insurance 200
Travel & Entertainment 976
Legal & Professional 12,949
Telephone & Utilities 12,317
Bad Debts 566
Postage 5,502
Supplies 17,685
Licenses & Permits 135
Property Tax 95
Franchise Tax 800
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Total Operating Expenses 226,161
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Net Income (Loss) Before Taxes (100,304)
OTHER INCOME & (EXPENSE)
Rent 391
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Total Other Income & Expense 391
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Net Income (Loss) Before Taxes (102,304)
PROVISION FOR INCOME TAX (Note 2) -0-
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NET INCOME (LOSS) $(102,304)
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</TABLE>
See Accompanying Notes to Financial Statements
4
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SURGICAL FUNDING GROUP, INC.
STATEMENT OF STOCKHOLDERS' EQUITY
(UNAUDITED)
JULY 1, 1994 TO JUNE 30, 1995
<TABLE>
<CAPTION>
ADDITIONAL
COMMON PAID-IN RETAINED
STOCK CAPITAL EARNINGS
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<S> <C> <C> <C>
Balance, July 1, 1994 $ 25,100 $ -0- $ (138,404)
Net (Loss) for the Year
Ended June 30, 1995 (102,304)
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Balance, June 30, 1995 $ 25,100 -0- $ (240,708)
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</TABLE>
See Accompanying Notes to Financial Statements
5
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SURGICAL FUNDING GROUP, INC.
STATEMENT OF CASH FLOWS
(UNAUDITED)
JULY 1, 1994 TO JUNE 30, 1995
<TABLE>
<CAPTION>
<S> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net (Loss) $ (102,304)
Adjustments to Reconcile Net Income to Net Cash
Provided by Operating Activities:
Depreciation & Amortization 5,196
Increase (Decrease) in Accrued Liabilities 99,527
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Net Cash Provided (Used) by Operating Activities 2,419
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CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of Equipment (3,000)
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Net Cash Provided (Used) by Investing Activities (3,000)
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CASH FLOWS FROM FINANCING ACTIVITIES
Payments on Note Payable (18,852)
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Net Cash Provided (Used) by Financing Activities (18,852)
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NET INCREASE (DECREASE) IN CASH (19,433)
CASH AT BEGINNING OF PERIOD 19,954
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CASH AT END OF PERIOD $ 521
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</TABLE>
See Accompanying Notes to Financial Statements
6
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SURGICAL FUNDING GROUP, INC.
NOTES TO FINANCIAL STATEMENTS
(UNAUDITED)
JUNE 30, 1995
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
This summary of significant accounting policies of Surgical Funding
Group, Inc. (the Company) is presented to assist in understanding the
Company's financial statements. The financial statements and notes
are representations of the Company's management who is responsible
for their integrity and objectivity. These accounting policies conform
to generally accepted accounting principles and have been consistently
applied in the reparation of the financial statements.
BUSINESS ACTIVITY
The Company is a broker in the business of providing financing for
medical surgeries. The Company began operations in August, 1992.
BASIS OF ACCOUNTING
The Company uses the accrual basis of accounting for both financial
statement and income tax purposes.
ACCOUNTS RECEIVABLE
The Company has established a program to provide consumer financing
for medical surgeries. Surgical Funding Group, Inc. earns the
majority of its revenues by 1) charging a sign-up fee to medical
practitioners who enter the program and, 2) collecting a commission
from the finance companies when a surgery is funded. The typical
sign-up fee is $495 and the commission is 7.5% of the amount funded.
As of June 30, 1995, there were no accounts receivable.
FIXED ASSETS
Fixed Assets are carried at cost. Depreciation of fixed assets is
provided using the Modified Accelerated Cost Recovery System (MACRS)
for both financial statement and federal income tax purposes with
the following estimated useful lives:
<TABLE>
<CAPTION>
YEARS
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<S> <C>
Office Equipment 5
Furniture & Fixtures 7
</TABLE>
NOTE 2 INCOME TAXES
The Company accrues income taxes on its taxable income. As of June 30,
1995 there was no taxable income, hence, there is no provision for
federal or state taxes.
The Company, as of June 30, 1995, has net operating loss carryforwards
in the amounts of $159,574 and $90,147 for federal and state
(California) purposes respectively.
7
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SURGICAL FUNDING GROUP, INC.
NOTES TO FINANCIAL STATEMENTS
(UNAUDITED)
JUNE 30, 1995
NOTE 3 NOTES PAYABLE
Notes Payable at June 30, 1995 consist of the following:
<TABLE>
<CAPTION>
LONG
CURRENT TERM TOTAL
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<S> <C> <C> <C>
Note payable related corporation,
payable on demand bearing
interest at 10% per annum. $130,749 $ 130,749
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</TABLE>
NOTE 4 COMMISSIONS
The Company pays commissions to the sales agents based upon the
enrollment of a medical practitioner and the collection of Company
commission from the finance companies. Typically, the sales agents
received between 20 and 40 percent of the sign-up fees (depending
upon volume) and 1 percent of the Company's commission revenue.
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SIGNATURES
Pursuant to the requirement of the Securities and Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
MEDPLUS CORPORATION
March 11, 1996 By /s/ Tim C. DeHerrera
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Tim C. DeHerrera
President
March 11, 1996 By /s/ Robert T. Ryman
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Robert T. Ryman
Chief Financial Officer
Chief Accounting Officer
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