<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
____________
FORM 10-Q
QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For Quarter Ended
September 30, 1995 Commission File No.1-10418
UNITED MEDICORP, INC.
(Exact name of registrant as specified in charter)
DELAWARE 75-2217002
(State or other jurisdiction of (IRS employer identification no.)
incorporation or organization)
10210 N. CENTRAL EXPRESSWAY, #400
DALLAS, TEXAS 75231
(Address of principal (Zip Code)
executive offices)
Registrant's telephone number, including area code:
214/691-2140
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 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 No
----- ------
As of October 1, 1995, there were outstanding 26,310,217 shares of Common
Stock, $.01 par value.
<PAGE>
UNITED MEDICORP, INC.
September 30, 1995
TABLE OF CONTENTS
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Balance Sheet as of September 30, 1995
and December 31, 1994 . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Consolidated Statement of Revenues and Expenses
for the Three Months Ended September 30, 1995 and 1994, and
for the Nine Months Ended September 30, 1995 and 1994 . . . . . . . . . . . 4
Consolidated Statement of Cash Flows for the
Three Months Ended September 30, 1995 and 1994, and
for the Nine Months Ended September 30, 1995 and 1994 . . . . . . . . . . . 5
Notes to Consolidated Financial Statements. . . . . . . . . . . . . . . . . 6
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations . . . . . . . . . . . . . . . . . . . . 7
PART II. OTHER INFORMATION
Item 1. Legal Proceedings . . . . . . . . . . . . . . . . . . . . . . . . 14
Item 2. Changes in Securities . . . . . . . . . . . . . . . . . . . . . . 14
Item 3. Default Upon Senior Securities. . . . . . . . . . . . . . . . . . 14
Item 4. Submission of Matters to a Vote of Security Holders . . . . . . . 14
Item 5. Other Information . . . . . . . . . . . . . . . . . . . . . . . . 14
Item 6. Exhibits and Reports on Form 8-K. . . . . . . . . . . . . . . . . 14
SIGNATURES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
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<PAGE>
UNITED MEDICORP, INC.
CONSOLIDATED BALANCE SHEET
<TABLE>
<CAPTION>
(UNAUDITED) (AUDITED)
SEPTEMBER 30, DECEMBER 31,
1995 1994
------------- ------------
<S> <C> <C>
CURRENT ASSETS:
Cash and cash equivalents $ 74,977 $ 351,233
Restricted cash 0 4,851
Purchased claims 0 37,721
Accounts receivable (net) 146,160 154,592
Notes receivable (net) 2,214 12,214
Prepaid expenses and other 22,740 24,630
------------ ------------
Total current assets 246,091 585,241
PROPERTY AND EQUIPMENT (net) 226,808 322,300
OTHER ASSETS:
Goodwill 3,799 5,353
Deposits 14,818 22,272
------------ ------------
TOTAL ASSETS $ 491,516 $ 935,166
============ ============
CURRENT LIABILITIES:
Payable to clients $ 268 $ 26,640
Trade accounts payable 78,586 63,257
Accrued expenses 133,604 137,462
Notes payable 0 200,000
Deferred revenue 15,959 0
Current portion of capital lease obligations 27,265 18,576
------------ ------------
Total current liabilities 255,682 445,935
LONG TERM LEASE OBLIGATION 145,809 164,187
DEFERRED CREDITS 12,574 31,319
STOCKHOLDERS' EQUITY
Common stock, $.01 par value; 50,000,000
authorized, 26,415,764 shares issued at 9/30/95
and 12/31/94 264,157 264,157
Less: 105,547 shares of treasury stock, at 9/30/95
and 12/31/94, at cost (221,881) (221,881)
Additional paid-in capital 18,552,341 18,552,341
Retained deficit (18,517,166) (18,300,892)
------------ ------------
Total stockholders' equity 77,451 293,725
------------ ------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 491,516 $ 935,166
============ ============
</TABLE>
The accompanying notes are an integral part of these financial statements.
-3-
<PAGE>
UNITED MEDICORP, INC.
CONSOLIDATED STATEMENT OF REVENUES AND EXPENSES
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS THREE MONTHS NINE MONTHS NINE MONTHS
ENDED ENDED ENDED ENDED
SEPT. 30, 1995 SEPT. 30, 1994 SEPT. 30, 1995 SEPT. 30, 199
-------------- -------------- -------------- -------------
<S> <C> <C> <C> <C>
REVENUES:
Fee income $ 450,969 $ 345,957 $1,536,455 $ 944,033
Interest income 403 (1,949) 3,593 8,899
--------- --------- ---------- ----------
Total revenues 451,372 344,008 1,540,048 952,932
EXPENSES:
Salaries and benefits 380,817 281,302 1,179,160 806,304
Selling, general and
administrative 127,314 209,873 360,532 544,902
Professional fees 15,156 21,948 49,060 90,183
Office and equipment rental 20,594 15,470 56,354 48,655
Depreciation and amortization 39,792 26,791 98,057 77,108
Interest 3,800 2,540 14,457 9,116
Other (1,200) (573) (1,298) 14,910
--------- --------- ---------- ----------
Total expenses 586,273 557,351 1,756,322 1,591,178
--------- --------- ---------- ----------
NET LOSS $(134,901) $(213,343) $ (216,274) $ (638,246)
========= ========= ========== ==========
NET LOSS PER SHARE $ (0.01) $ (0.01) $ (0.01) $ (0.03)
========= ========= ========== ==========
WEIGHTED AVERAGE
COMMON SHARES OUTSTANDING 26,310,217 24,730,218 26,310,217 24,203,551
========== ========== ========== ==========
</TABLE>
The accompanying notes are an integral part of these financial statements.
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<PAGE>
UNITED MEDICORP, INC.
CONSOLIDATED STATEMENT OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS THREE MONTHS NINE MONTHS NINE MONTHS
ENDED ENDED ENDED ENDED
SEPT. 30, 1995 SEPT. 30, 1994 SEPT. 30, 1995 SEPT. 30, 1994
-------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
OPERATING ACTIVITIES:
Net (loss) $(134,901) $(213,343) $(216,274) $(638,246)
Adjustments to reconcile net loss to cash used in
operating activities:
Depreciation and amortization 39,792 26,791 98,057 77,108
(Gain) Loss on disposal of assets 0 (604) 0 14,911
Decrease in restricted cash 0 0 4,851 0
(Increase) Decrease in purchased claims 0 (60,000) 37,721 (60,000)
Decrease in accounts receivable 10,725 41,857 8,432 74,965
Decrease in notes receivable 10,000 0 10,000 0
(Increase) Decrease in prepaid expenses and other (5,685) (11,413) 1,890 (10,044)
Increase (Decrease) in payable to clients 268 0 (26,372) 0
Increase (Decrease) in accounts payable 468 (5,262) 15,329 11,416
Increase (Decrease) in accrued expenses (1,554) 12,225 (3,858) (52,130)
Increase (Decrease) in deposits and other (726) (50,000) 7,454 (50,000)
Increase in deferred revenue 15,959 0 15,959 0
Increase (Decrease) in deferred credits 4,744 (11,745) (18,745) (35,234)
--------- --------- --------- ---------
Net cash (used) by operating activities (60,910) (271,494) (65,556) (667,254)
--------- --------- --------- ---------
INVESTING ACTIVITIES:
Property and equipment, net (1,446) (29,462) (1,011) (129,980)
--------- --------- --------- ---------
Net cash (used) by investing activities (1,446) (29,462) (1,011) (129,980)
--------- --------- --------- ---------
FINANCING ACTIVITIES:
Common stock subscribed 0 353,485 0 353,485
Decrease in restricted cash 0 200,000 0 200,000
Repayment of notes payable 0 0 (200,000) (882)
Payments of capital lease obligations (9,689) (9,481) (9,689) (27,074)
Other 0 0 0 287
--------- --------- --------- ---------
Net cash (used) provided by financing activities (9,689) 544,004 (209,689) 525,816
--------- --------- --------- ---------
INCREASE(DECREASE) IN CASH AND CASH EQUIVALENTS (72,045) 243,048 (276,256) (271,418)
CASH AND CASH EQUIVALENTS, beginning of period 147,022 332,852 351,233 847,318
--------- --------- --------- ---------
CASH AND CASH EQUIVALENTS, end of period $ 74,977 $ 575,900 $ 74,977 $ 575,900
========= ========= ========= =========
Additional Cash Flow Information
Cash paid for interest $ 3,440 $ 2,798 $ 15,051 $ 9,571
</TABLE>
The accompanying notes are an integral part of these financial statements.
-5-
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. BASIS OF PREPARATION
United Medicorp, Inc. (the "Company" or "UMC") is a publicly held company traded
on the over the counter market under the symbol UMCI, UMC was founded in March,
1989 to provide medical insurance claims management services to healthcare
providers throughout the United States.
The accompanying consolidated financial statements as of September 30, 1995 and
for the three and nine month periods ended September 30, 1995 and 1994 are
unaudited. However, in the opinion of management, all adjustments consisting of
normal recurring adjustments necessary for the fair presentation of financial
position, results of operations, and cash flows for the periods shown have been
made, except the consolidated financial statements do not include any
adjustments that might result from the uncertainty described in Note 2 below.
Certain information and footnote disclosures normally included in financial
statements prepared in accordance with generally accepted accounting principles
have been omitted pursuant to the rules and regulations of the Securities and
Exchange Commission, although management believes that the disclosures contained
herein are adequate to make the information presented not misleading. These
financial statements should be read in conjunction with the financial statements
and the notes thereto included in the Company's Annual Report on Form 10-K for
the year ended December 31, 1994.
2. CAPITAL INFUSION AND GOING CONCERN
At September 30, 1995, the Company had $74,977 in cash and cash equivalents and
$146,160 in net accounts receivable. The Company had negative cash flow of
$72,045 during the third quarter of 1995. These funds along with forecasted
revenues are projected by management to be adequate to fund current levels of
operations through 1995. The Company continues to pursue new business primarily
through direct contacts with prospective customers in an effort to generate
additional revenues. There is no assurance that revenues generated from
existing customers will continue as forecasted or that the Company will be
successful in securing new customers or sources of revenue before the Company's
remaining capital is depleted. In the event such new customers or sources of
revenue are not secured, management projects that cash flow from operations may
not be sufficient to provide for the Company's working capital needs beyond
1995, in which case the Company will be required to raise additional capital in
order to continue operating in its present form. Due to the Company's history
of operating losses there can be no assurance that additional investment capital
can be raised in the event the Company is not successful in securing new
customers or new sources of revenue.
3. ACCOUNTS RECEIVABLE
Accounts receivable represents fees which have been billed to and are due from
customers. Included in the $146,160 of accounts receivable at September 30,
1995 are $13,762 related to services rendered to Healthcare Advisory Service of
Puerto Rico ("HAS"). As of the date of
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<PAGE>
this report, HAS cash reserves are zero. The ability of HAS to pay UMC for
services rendered is contingent upon receipt by HAS of payment from its
customers for services rendered. There can be no assurance that such payment
will be received, or if it will be received within the timeframe anticipated
by HAS and UMC management. However, invoice payments totalling $138,439 have
been made by HAS to UMC during the first nine months of 1995. The Company
has not established any reserve for bad debts related to receivables due from
HAS.
4. NOTES PAYABLE
On September 30, 1994, the Company signed a promissory note to borrow $200,000
from an offshore bank. The note bore interest at a rate of 15% per annum and
was due and payable on March 31, 1995. Payment of the note was secured by the
pledge of the Company's assets. The funds borrowed were used in the Company's
Medical Claims Purchase program. This note was repaid in full with interest in
two installments on January 30 and February 24, 1995.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
GENERAL: On September 21, the Company signed a Backlog contract with a 400 bed
hospital located in the midwest. The initial placement under this contract
involves accounts aged over one year.
On September 15, the Company signed a contract with a local hospital to
determine the availability of third party coverage on about 1,200 patient
files. The Company was paid a small fee for this service and is currently
discussing addition special project assignments with this client.
During the third quarter, the Company placed a total of four UMClaimPros on
interim assignments in the business offices of healthcare providers. All four
of these assignments were of short duration. UMClaimPros revenue for the third
quarter was $20,181 as compared to second quarter revenue of $61,962. The gross
margin on UMClaimPros services is considerably less than the gross margin on
UMC's other services. On June 30, 1995, the Company completed a UMClaimPros
assignment at a local hospital. This assignment produced 76 percent of the
UMClaimPros revenue during the second quarter.
On January 30 and February 24, 1995, the Company made two installments to repay
in full with interest the $200,000 promissory note from an offshore bank.
During the fourth quarter of 1994, the Company initiated claims processing
operations for a rural hospital ("RH") located in the southwestern United
States. The Company's services to RH include Advance Funding, "Backlog" and
"Ongoing" claims management services. Each of these services is governed by a
separate contract between RH and UMC. During the three months ended September
30, 1995, the Company billed and collected Backlog fees of $2,451, and Ongoing
fees of $80,333 under the RH contracts.
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<PAGE>
During the fourth quarter of 1994, the management of RH advised UMC that RH
intended to discontinue using the Advance Funding service provided by UMC. In
addition, as described in the Company's Annual Report on Form 10K, Backlog
contracts involve a one-time placement of claims which result in non-recurring
revenue to UMC. As of September 30, 1995, most of the backlog claims RH had
placed with UMC pursuant to the initial Backlog contract had been either
collected or denied. However, the Company did receive a second placement of
backlog claims on October 23, 1995 which will result in future Backlog revenues
from RH. The Ongoing contract with RH was extended until April 1, 1996. The
collection fee charged the client was reduced by ten percent as part of the
contract extension. There can be no assurance that this contract will be
extended past April 1, 1996, or if it is extended, that the contract will
generate additional revenue as anticipated by UMC management.
PUERTO RICAN OPERATIONS: On September 1, 1995, the Company signed a contract
with a group of 15 physicians which provide emergency room services. The
Company estimates that this contract will produce between $200 and $500 in
monthly revenue.
The Company's principal source of revenue in Puerto Rico is a contract which was
signed September 18, 1994 between Healthcare Advisory Service of Puerto Rico,
Inc. ("HAS"), and a government agency known as "AFASS". Under this contract,
the Company served as a subcontractor to HAS in processing claims with dates of
service from October 1, 1994 to June 30, 1995 for a government funded hospital
("GH") and four government funded clinics. UMC's fees for services rendered to
the clinics are computed at 10% of collections. UMC has to date recognized fees
for services rendered to GH during this period totalling $106,466. The fee
structure for GH is 30% of the first $500,000 collected over a baseline of
$1.875 million, 25% of the next $500,000 collected over the baseline, with 20%,
15%, and 10% fee rates available on successive $500,000 increments over the
contract baseline.
On June 25, 1995, the AFASS contract was amended to allow the continuation of
services for an undefined period of time beyond June 30, 1995. In addition, the
Company received the right to process claims from four additional clinics, thus
increasing the number of AFASS clinics served to eight. The baseline for the GH
portion of the contract was reset at $2.5 million for the one year period from
July 1, 1995 to June 30, 1996.
During the third quarter, the Company's Puerto Rican operation generated
revenues of $9,395, direct expenses of $69,721, and an operating loss of
$60,326. The primary reasons for the loss of $60,326 were the costs and normal
delay in collections associated with the start up of services for the four
additional AFASS clinics and the costs and normal delay in collections
associated with the start of a new baseline measurement period for GH for claims
with dates of service beginning July 1, 1995.
Management believes that collections during the fourth quarter will be
sufficient to generate revenues on all of the eight clinics served, and the GH.
However, there can be no assurance that the revenues produced will be sufficient
to realize a profit, or that the contract will not be canceled or restructured
by AFASS.
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<PAGE>
At September 30, 1995 the Company had receivables due from HAS in the amount of
$13,762. On October 25, 1995, the Company received from HAS $8,592 in payment
against these receivables. Invoice payments totalling $138,439 have been made
by HAS to UMC during the first nine months of 1995. The Company has not
established any reserve for bad debts related to receivables due from HAS.
There can be no assurance that the Company's current and future invoices to HAS
for claims processing services rendered in Puerto Rico will be paid as expected.
At September 30, the Company had short term loans outstanding to HAS in the
amount of $2,000. All remaining principal and accrued interest was repaid by
HAS on October 25, 1995.
SUBSEQUENT EVENTS: On October 9, Ross Spinazzola resigned as Treasurer and
Corporate Secretary effective November 15. Mr. Spinazzola has been with United
Medicorp since its inception in 1989.
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<PAGE>
The following table sets forth for each period indicated the volume and gross
dollar amount of insurance claims received and fees recognized for each of
the Company's two principal services. In general, collections on most
healthcare providers' new claims ("Ongoing") tend to average about 25 to 80
percent of the gross claim amount. Backlog collection ratios range from 0 to
about 40 percent of the aggregate gross claim amount because many backlog
claims have already been paid or denied by the insurance carriers prior to
submission of the claims to UMC. For these previously paid claims, UMC often
charges an administrative fee which is less than a collection fee.
PROCESSING VOLUME AND FEES
<TABLE>
<CAPTION>
1993 1994 1995
------- ---------------------------------- -------------------------
FOURTH FIRST SECOND THIRD FOURTH FIRST SECOND THIRD
QUARTER QUARTER QUARTER QUARTER QUARTER QUARTER QUARTER QUARTER
------- ------- ------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
NUMBER OF CLAIMS
ACCEPTED FOR
PROCESSING
ONGOING 30,829 24,690 32,552 32,280 38,779 46,972 46,021 43,161
BACKLOG 569 553 48 0 5,753 0 0 0
------ ------ ------ ------ ------ ------ ------ ------
TOTAL 31,398 25,243 32,600 32,280 44,532 46,972 46,021 43,161
GROSS AMOUNT OF
CLAIMS ACCEPTED FOR
PROCESSING ($000)
ONGOING 15,721 12,502 14,935 14,280 18,571 19,182 19,999 18,791
BACKLOG 678 1,067 207 0 3,362 0 0 0
------ ------ ------ ------ ------ ------ ------ ------
TOTAL 16,399 13,569 15,142 14,280 21,933 19,182 19,999 18,791
COLLECTIONS ($000)
ONGOING 6,939 6,277 6,516 7,336 7,851 9,270 9,883 9,613
BACKLOG 756 375 136 194 130 272 159 28
------ ------ ------ ------ ------ ------ ------ ------
TOTAL 7,695 6,652 6,652 7,530 7,981 9,542 10,042 9,641
FEES EARNED ($000)
ONGOING 308 278 290 332 371 549 482 449
BACKLOG 37 22 8 14 15 39 15 2
------ ------ ------ ------ ------ ------ ------ ------
TOTAL 345 300 298 346 386 588 497 451
</TABLE>
For Ongoing claims, there is typically a time lag of approximately 30 to 45
days from contract execution to computer hardware installation and training
of customer personnel. During this period, Company personnel survey the
customer's existing operations and prepare for installation. Following
installation and training of the customer's personnel, the customer begins
entering claims and transmitting them to the Company. There is usually a time
lag of 30 to 90 days between transmission of a claim to a third party payor
and collection of a claim from that payor.
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<PAGE>
QUARTERLY INFORMATION: Total fees earned increased $105,012, or 30 percent,
from $345,957 for the three months ended September 30, 1994 to $450,969 for
the three months ended September 30, 1995. The increase was due to increased
revenues from domestic customers, UMClaimPros placements and revenues from
Puerto Rican operations. Other income increased $2,352, from ($1,949) for
the three months ended September 30, 1994 to $403 for the three months ended
September 30, 1995.
Salaries and benefits for the third quarter of 1995 increased $99,515, or 35
percent, from $281,302 for the three months ended September 30, 1994 to
$380,817 for the three months ended September 30, 1995. Total headcount
increased from 32 at September 30, 1994 to 52 at September 30, 1995,
excluding temporary and part-time employees.
Selling, general and administrative expenses decreased $82,559, or 39
percent, from $209,873 for the three months ended September 30, 1994 to
$127,314 for the three months ended September 30, 1995, due to decreases in
dealer commission, temporary labor, travel, system usage fees and maintenance
expenses offset by increases in travel, telephone and office supply expenses
for Puerto Rican operations.
Professional fees decreased by $6,792, or 31 percent, from $21,948 in the
third quarter of 1994 to $15,156 in the third quarter of 1995, due to lower
consulting fees.
Rental expense increased $5,124, or 33 percent, from $15,470 in the third
quarter of 1994 to $20,594 in the third quarter of 1995, due to the opening
of the UMC office in Ponce, Puerto Rico on May 15, 1995.
Depreciation and amortization increased $13,001, or 49 percent, from $26,791
in the third quarter of 1994 to $39,792 in the third quarter of 1995, due to
a deferred lease credit of $10,828 and fixed asset additions during 1994,
including the lease of the new IBM AS/400 on December 29, 1994.
Interest expense increased by $1,260, or 50 percent, from $2,540 in the third
quarter of 1994 to $3,800 in the third quarter of 1995.
Other expenses decreased $627 in the third quarter of 1995 as compared to the
third quarter of 1994, due to larger gains on the disposal of assets during
the third quarter of 1995.
NINE MONTH INFORMATION: Total fees earned increased $592,422, or 63 percent,
from $944,033 for the nine months ended September 30, 1994 to $1,536,455 for
the nine months ended September 30, 1995. The increase was due to increased
revenues from domestic customers, the start up of Puerto Rican operations and
revenues generated by UMClaimPros placements. Other income decreased $5,306,
from $8,899 for the nine months ended September 30, 1994 to $3,593 for the
nine months ended September 30, 1995.
Salaries and benefits for the first nine months of 1995 increased $372,856,
or 46 percent, from $806,304 for the nine months ended September 30, 1994 to
$1,179,160 for the nine months
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<PAGE>
ended September 30, 1995. Total headcount increased from 32 at September 30,
1994 to 52 at September 30, 1995, excluding temporary and part-time
employees.
Selling, general and administrative expenses decreased $184,370, or 34
percent, from $544,902 for the nine months ended September 30, 1994 to
$360,532 for the nine months ended September 30, 1995, due to decreases in
temporary labor, dealer commissions, recruiting, maintenance, travel and
system usage fees offset by an increase in telephone, supplies and postage
expenses as a result of increased domestic claims volume and the start up of
operations in Puerto Rico.
Professional fees decreased by $41,123, or 46 percent, from $90,183 in the
first nine months of 1994 to $49,060 in the first nine months of 1995, due to
lower consulting, legal and stock related expenses.
Rental expense increased $7,699, or 16 percent, from $48,655 in the first
nine months of 1994 to $56,354 for the first nine months of 1994, due to the
opening of the office in Ponce, Puerto Rico on May 15, 1995.
Depreciation and amortization increased $20,949, or 27 percent, from $77,108
in the first nine months of 1994 to $98,057 in the first nine months of 1995,
due to a deferred lease credit of $10,828 and fixed asset additions during
1994, including the lease of the new IBM AS/400 on December 29, 1994.
Interest expense increased by $5,341, or 59 percent, from $9,116 in the first
nine months of 1994 to $14,457 in the first nine months of 1995.
Other expenses decreased $16,208 in the first nine months of 1995 as compared
to the first nine months of 1994, due to losses on the disposal of assets
during the first nine months of 1994.
LIQUIDITY AND CAPITAL RESOURCES
SOURCES OF CAPITAL: Operating capital through September 30, 1995 has been
derived primarily from the issuance of Common Stock ($18.8 million).
CAPITAL EXPENDITURES: During the third quarter of 1995 the Company purchased
additional computer and office equipment with an original cost of $1,446.
LIQUIDITY OUTLOOK: At September 30, 1995, the Company had $74,977 in cash
and cash equivalents and $146,160 in net accounts receivable. The Company
had negative cash flow of $72,045 during the third quarter of 1995.
There can be no assurance that the Company's invoices to HAS for claims
processing services rendered in Puerto Rico will be paid as expected.
However, invoice payments totalling $138,439 have been made by HAS to UMC
during the first nine months of 1995. The Company has not established any
reserve for bad debts related to receivables due from HAS.
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<PAGE>
While management believes that the Company could attain profitability before
available operating capital is consumed, there are considerable risks,
including primarily the need for additional sustainable revenues, that
additional capital will be needed. There can be no assurance that such
capital will be available, or of the terms on which such capital might be
made available. Additionally, UMC has incurred cumulative losses of
$18,517,166 since inception. These factors raise substantial doubt about the
Company's ability to continue as a going concern.
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<PAGE>
UNITED MEDICORP, INC.
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
The Company is the defendant in a lawsuit filed on March 2, 1995 by a former
employee of the Company. The lawsuit charges the Company with wrongful
discharge. The former employee seeks unspecified past and future economic loss,
damages, exemplary damages, reinstatement, attorney's fees and interest. The
plaintiff has requested a trial by jury. Management believes this lawsuit to be
without merit and intends to vigorously defend against the claim.
ITEM 2. CHANGES IN SECURITIES
Not applicable.
ITEM 3. DEFAULT UPON SENIOR SECURITIES
Not applicable.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
Not applicable.
ITEM 5. OTHER INFORMATION
Not applicable.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
Not applicable.
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<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this Quarterly Report to be signed on its behalf
by the undersigned, thereunto duly authorized.
UNITED MEDICORP, INC.
(REGISTRANT)
By: /s/ Peter W. Seaman Date: November 10, 1995
------------------------------ -----------------
Peter W. Seaman, President and
Chief Executive Officer
By: /s/ Ross Spinazzola Date: November 10, 1995
------------------------------ -----------------
Ross Spinazzola, Treasurer
(Principal Accounting Officer)
-15-
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> SEP-30-1995
<CASH> 74,977
<SECURITIES> 0
<RECEIVABLES> 146,160
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 246,091
<PP&E> 226,808
<DEPRECIATION> 0
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0
0
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<SALES> 1,536,455
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<CHANGES> 0
<NET-INCOME> (216,274)
<EPS-PRIMARY> (.01)
<EPS-DILUTED> (.01)
</TABLE>
