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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K/A-1
(MARK ONE)
[ X ] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
FOR THE YEAR ENDED DECEMBER 31, 1997
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM TO
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COMMISSION FILE NUMBER 1-10418
UNITED MEDICORP, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE 75-2217002
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
10210 NORTH CENTRAL EXPRESSWAY
SUITE 400
DALLAS, TEXAS 75231
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (214) 691-2140
SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:
TITLE OF EACH CLASS NAME OF EACH EXCHANGE ON WHICH REGISTERED
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NONE NONE
SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:
TITLE OF EACH CLASS
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COMMON STOCK, $0.01 PAR VALUE
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
--- ---
Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be
contained, to the best of the registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form
10-K or any amendment to this Form 10-K.
---
As of April 23, 1998, the aggregate market value of the voting stock
held by non-affiliates of the registrant was $2,330,377 based on the last
sales price of $0.125 per share of such stock on April 23, 1998. As of April
23, 1998 there were 27,910,217 shares of Common Stock, $0.01 par value
outstanding.
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UNITED MEDICORP, INC.
FORM 10-K/A-1
FOR THE FISCAL YEAR ENDED DECEMBER 31, 1997
TABLE OF CONTENTS
<TABLE>
PAGE
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PART III
<S> <C> <C>
ITEM 10. Directors and Executive Officers
of the Registrant.............................................. 3
ITEM 11. Executive Compensation........................................... 5
ITEM 12. Securities Ownership of Certain Beneficial
Owners and Management......................................... 8
ITEM 13. Certain Relationships and Related Transactions................... 9
Signatures ................................................................. 10
</TABLE>
<PAGE>
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
The Company's Bylaws provide that the number of directors which shall
constitute the whole Board shall be fixed from time to time by resolution of
the Board of Directors or stockholders but shall not be less than one nor
more than eleven. The current Board of Directors consists of four members.
Of the current directors, one is an employee of the Company and three have
principal occupations or employment which are outside the Company.
PETER W. SEAMAN (48) was elected President and Chief Executive Officer on
February 10, 1994, and Chairman of the Board of Directors on November 12,
1996. Mr. Seaman joined the Company on July 17, 1991 as Vice President and
Chief Financial Officer and was elected to the Board of Directors on August
12, 1991. Mr. Seaman's prior employment includes serving as Director of
Business Development for TRW Receivables Management Services from March, 1989
to June, 1991, and Vice President of Planning and Systems Development for the
Accounts Receivable Management Division of the Chilton Corporation from
March, 1986 to March, 1989. Prior to joining the Chilton Corporation, Mr.
Seaman was Vice President and Chief Financial Officer for Corliss, Inc., a
collection systems and services company. Before that, Mr. Seaman held a
number of finance, marketing, and auditing positions with the Datapoint
Corporation, Rockwell International, and Coopers and Lybrand. Mr. Seaman
holds a B.A. in Accounting from Duke University, and is a Certified Public
Accountant.
MICHAEL P. BUMGARNER (54) was elected to the Board of Directors on November
12, 1996. Mr. Bumgarner is President/CEO of AHC Texas, Inc., a San Antonio,
Texas based start-up Managed Service Organization positioned to deliver a
comprehensive managed healthcare program to employers in the State of Texas.
Mr. Bumgarner's prior experience includes Chairman/CEO of Beacon Enterprises,
Inc., a holding company which he co-founded in May, 1994 with interests in a
number of healthcare concerns including GSS "Gold Seal Services", one of the
largest home healthcare providers in the San Antonio area. GSS was sold to a
Dallas based public company in December, 1996. Prior to starting Beacon
Enterprises, Mr. Bumgarner worked as a consultant for a number of national
distributors of cardiovascular equipment in the southwest United States.
From 1977 to 1986, Mr. Bumgarner was founder and president of a national
healthcare company providing arrhythmia monitoring by telephone to patients
in their homes. During this period, he developed the "continuous loop
memory" arrhythmia transmitter and received a patent registered in the U.S.
Patent Office. After graduating from Auburn University, he was honorably
discharged from the USAF as a Captain and carried his electronics background
to the medical industry where he has spent over 25 years gaining extensive
senior business and management experience.
JOHN F. LEWIS (50) was elected to the Board of Directors on November 12,
1996. Mr. Lewis is a consultant specializing in Medicare reimbursement and
regulatory compliance for a number of healthcare industry concerns in Puerto
Rico and the Caribbean market area. From 1992 to 1995, Mr. Lewis served as
Health Advisor to the Governor of the U.S. Virgin Islands. From 1988 to
1992, Mr. Lewis was employed as Assistant Vice President for Medicare
Operations at Seguros de Servicios de Salud, the Medicare Part B Carrier for
Puerto Rico and the Caribbean. Mr. Lewis holds a B.A. in Business
Administration from the American College of Switzerland and a License in
Economic and Social Sciences from the University of Geneva.
THOMAS H. MCCONNELL, III, M.D. (60) was elected to the Board of Directors on
November 12, 1996. Dr. McConnell is former CEO of AM Laboratories, Inc., a
medical testing laboratory, and is currently active as a private investor and
consultant to a number of healthcare providers. From 1992 to 1994, Dr.
McConnell served as Chairman of the Executive Committee and a member of the
Board of Directors of AdvaCare, Inc., a publicly
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traded medical billing and collection agency. From 1992 to 1995, Dr.
McConnell served as a member of the Board of Directors of Osprey Holdings,
Inc., a publicly traded holding company formerly in the medical laboratory
software business. Dr. McConnell is a past Governor of the College of
American Pathologists, past President of the Texas Society of Pathologists,
and past member of the Board of Directors of the Dallas County Medical
Society. Dr. McConnell attended Rice University, holds a Doctor of Medicine
Degree from the University of Texas Southwestern Medical School and an OPM
certificate from the Harvard Business School.
Each director will hold office until next year's annual meeting of
stockholders, expected to be held in August, 1998, or until his successor is
elected and has qualified.
BOARD COMMITTEES AND MEETINGS
The principal standing committees of the Board of Directors include the
following:
AUDIT COMMITTEE. The Audit Committee's responsibilities include
recommending to the Board of Directors the independent auditors to be
employed for the purpose of conducting the annual audit of the Company's
financial statements, discussing with the auditors the scope of their
examination, reviewing the Company's financial statements and the auditors'
report thereon with Company personnel and the auditors, determining whether
the auditors have received all the explanations and information which they
had requested, and inviting the recommendations of the auditors regarding
internal controls and other matters.
The Company's Audit Committee was formed on August 15, 1990 and met once
during 1997. The Committee consists of Messrs. Lewis and Bumgarner.
COMPENSATION COMMITTEE. The Compensation Committee's responsibilities
include reviewing the Company's compensation plans, making recommendations in
areas concerning employee relations, and taking action or making
recommendations with respect to the compensation of executive officers,
including those who are directors.
The Company's Compensation Committee was formed on August 15, 1990 and
met twice during 1997. The Committee consists of Messrs. McConnell, Lewis and
Bumgarner.
STOCK OPTION COMMITTEE. The Company's Stock Option Committee was formed
on April 25, 1992 for the purpose of administering the 1992, 1995 and
proposed 1998 Stock Option Plans and met twice during 1997. The Stock Option
Committee consists of Messrs. McConnell, Lewis and Bumgarner.
The Board of Directors held six regularly scheduled meetings during the
fiscal year ended December 31, 1997. Various matters were approved during the
last fiscal year by unanimous written consent of the Board of Directors.
Each incumbent director-nominee attended during the last fiscal year at least
75% of the aggregate of (i) the total number of meetings of the Board of
Directors; and (ii) the total number of meetings held by all committees of
the Board on which such director served.
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COMPLIANCE WITH SECTION 16(a) OF THE SECURITIES ACT OF 1934
Pursuant to Section 16(a) of the Securities Act of 1934 and the rules
issued thereunder, the Company's executive officers and directors are
required to file with the Securities and Exchange Commission reports of
ownership and changes in ownership of the Common Stock. Copies of such
reports are required to be furnished to the Company. Peter W. Seaman filed a
late Form 4 reporting the receipt of a single stock option grant and the
cancellation of four prior stock option grants in 1997. Mary E. Rogers filed
a late Form 4 reporting the receipt of a single stock option grant and the
cancellation of one prior stock option grant in 1997. Michael P. Bumgarner
and John F. Lewis filed a late Form 4 reporting the receipt of a single
stock purchase warrant grant in 1997. Thomas H. McConnell filed a late Form 4
reporting the receipt of a single stock purchase warrant grant and the
purchase of common stock in 1997. R. Kenyon Culver filed a late Form 3
reporting the receipt of a single stock option grant in 1997.
ITEM 11. EXECUTIVE COMPENSATION
EXECUTIVE OFFICERS
Set forth below are tables showing: (1) in summary form, the
compensation paid for the years shown in the table to Mr. Seaman; (2) the
options granted to Mr. Seaman in 1997; and (3) exercise and year end
valuation information pertaining to stock options granted to Mr. Seaman. No
other executive officer of the Company received total annual salary and bonus
in excess of $100,000 in the fiscal years 1997, 1996 or 1995:
SUMMARY COMPENSATION TABLE
<TABLE>
LONG TERM COMPENSATION
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ANNUAL COMPENSATION AWARDS PAYOUTS
------------------------------ --------------------------------- -------
OTHER RESTRICTED SECURITIES
NAME ANNUAL STOCK UNDERLYING LTIP ALL OTHER
AND PRINCIPAL COMPENS- AWARD(S) OPTIONS/ PAYOUTS COMPEN-
POSITION YEAR SALARY ($) BONUS ($) SATION ($) ($) SARS (#) ($) SATION ($)
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Peter W. Seaman 1997 120,931 -- -- -- 700,000 -- --
Chairman and 1996 106,556 11,333 (1) -- -- 300,000 -- --
CEO 1995 97,501 -- -- -- -- -- --
</TABLE>
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(1) Represents 1995 bonus including accrued interest of $1,333, paid in 1996.
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OPTION/SAR GRANTS IN LAST FISCAL YEAR
<TABLE>
POTENTIAL
REALIZED VALUE AT
ASSUMED ANNUAL
RATES OF STOCK PRICE
APPRECIATION
INDIVIDUAL GRANTS FOR OPTION TERM
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% OF
NUMBER OF TOTAL
SECURITIES OPTIONS/
UNDERLYING SARs
OPTIONS/ GRANTED TO EXERCISE
SARs EMPLOYEES OR BASE
GRANTED IN FISCAL PRICE EXPIRATION
NAME (#) YEAR ($/SH) DATE 5% ($) 10% ($)
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<S> <C> <C> <C> <C> <C> <C>
Peter W. Seaman 700,000 54 0.07 April 6, 2007 30,816 78,093
</TABLE>
AGGREGATED OPTION/SAR EXERCISES AND FISCAL YEAR-END OPTION/SAR VALUES
<TABLE>
NUMBER OF SECURITIES VALUE OF UNEXERCISED
SHARES UNDERLYING UNEXERCISED IN-THE-MONEY
ACQUIRED OPTIONS/SARS AT FISCAL OPTIONS/SARS AT
ON VALUE YEAR-END (#) FISCAL YEAR-END (1) ($)
EXERCISE REALIZED -------------------------- --------------------------
NAME (#) ($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
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<S> <C> <C> <C> <C> <C> <C>
Peter W. Seaman -- -- 200,000 800,000 2,000 1,000
</TABLE>
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(1) The last reported sale of the Company's Common Stock as reported on the
NASD OTC Bulletin Board as of December 30, 1997 was $0.06 per share. Value
is calculated on the basis of the difference between the option exercise
price and $0.06 multiplied by the number of shares of Common Stock
underlying the option.
STOCK OPTION PLANS
The Company currently has in effect the Third Amended and Restated 1989
Stock Option Plan (the "1989 Plan"), which provided for the granting of
incentive and non-incentive stock options for up to 1,000,000 shares of
Common Stock to employees, directors and consultants. The 1989 Plan became
effective August 6, 1989 and terminates after 10 years. The Board of
Directors approved the discontinuance of any further option grants under the
1989 Plan on April 25, 1992, when the 1992 Plan (as defined below) was
approved by stockholders.
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The stockholders of United Medicorp, Inc. approved the 1992 Stock Option
Plan (the "1992 Plan") at the 1992 Annual Meeting of Stockholders. The 1992
Plan provides for the granting of incentive and nonqualified stock options
for up to 1,000,000 shares of Common Stock to employees, directors, and
consultants. The 1992 Plan became effective on July 13, 1992 and terminates
after 10 years.
The stockholders of United Medicorp, Inc. approved the 1995 Stock Option
Plan (the "1995 Plan") at the 1995 Annual Meeting of Stockholders. The 1995
Plan provides for the granting of incentive and nonqualified options for up
to 1,000,000 shares of Common Stock to employees and non-employee directors.
The 1995 Plan became effective on August 14, 1995 and terminates after 10
years.
DIRECTOR COMPENSATION
GENERAL: An officer of the Company who also serves as a Director
receives no additional compensation for serving as a Director or as a member
or chair of a committee. Members receive no cash compensation for serving on
the Board of Directors. Board members are reimbursed for expenses of meeting
attendance.
1997 DIRECTOR COMPENSATION: Pursuant to the 1995 Stock Option Plan,
each non-employee director shall receive nonqualified stock options for the
purchase of 25,000 shares of Common Stock. These options shall be granted on
the first and each subsequent anniversary of the approval of the 1995 Stock
Option Plan by stockholders, as long as the director serves on the Board.
The exercise price shall be the fair market value of the Common Stock on the
date the nonqualified stock options are granted. One half of the option
shall be exercisable immediately and the remainder of the option shall become
exercisable on the first anniversary date of the grant. All options shall
expire on the tenth anniversary of the date granted.
Subsequent to stockholder approval of the 1995 Stock Option Plan, the
Board of Directors determined that in light of the condition of the Company
immediately prior to November 12, 1996 when the current members of the Board
of Directors were elected, the provisions of the 1995 Stock Option Plan
regarding director compensation were inadequate to attract and retain
qualified board members. As such, on April 1, 1997, warrants to purchase a
total of 1,200,000 shares of the Company's common stock at $0.08 per share
were issued to the three non-employee board members with each member
receiving warrants for 400,000 shares. These warrants are exercisable 33
1/3% immediately, 66 2/3% after twelve months from the effective date of the
grant, and 100% after twenty four months from the effective date of the
grant. These warrants expire on March 31, 2007. Currently, the members of
the Board of Directors hold no options under the Company's stock option
plans, and each member has waived his right to receive such options.
In addition, on March 19, 1997, each non-employee member of the Board of
Directors entered into a Director's Incentive Compensation Agreement. This
agreement has a term of three years under which the director shall be paid a
commission based on fees billed and collected from new customers sold by or
with the assistance from such director. The commission will be 10 percent
during the first year of a contract with a given customer, 6 percent during
the second contract year, and 4 percent thereafter. The Director's
compensation may be paid in either cash, common stock, or stock purchase
warrants upon approval of the Compensation and Stock Option Committee.
For the year ended December 31, 1997, total compensation earned but not
paid under Dr. McConnell's Director's Incentive Compensation Agreement was
$1,326.
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COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
As noted above, the current members of the Compensation Committee are
Messrs. McConnell, Lewis and Bumgarner. None of the members of the
Compensation Committee served as members of the compensation committee or
other board committees performing similar functions of any other registered
entity in 1997.
ITEM 12. SECURITIES OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table and the notes thereto set forth certain information
regarding the beneficial ownership of shares of the Company's Common Stock as
of April 24, 1998 by (i) each current director and nominee for director; (ii)
all current directors and officers of the Company as a group; and (iii) each
person known to the Company to own beneficially more than five percent (5%)
of the currently outstanding Common Stock. Unless there is a footnote to the
contrary, sole voting and investment power in the shares owned are held
either by the named individual alone or by the named individual and his or
her spouse:
<TABLE>
NUMBER OF SHARES OF UNITED MEDICORP, INC. COMMON STOCK (1)
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SHARES EXERCISABLE
BENEFICIALLY WARRANTS/ PERCENT OF
NAME OWNED OPTIONS (3) CLASS (1)
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<S> <C> <C> <C>
Mercury Asset Management plc. (2) 8,067,200 -- 28.9%
33 King William Street
London EC4R 9AS Great Britain
Tambura Limited 1,484,000 -- 5.3%
Rue du Moulin
Sark, Channel Islands
Peter W. Seaman (4) 100,000 433,333 1.9%
Thomas H. McConnell, III (5) 1,000,000 266,667 4.5%
Michael P. Bumgarner (6) 100,000 266,667 1.3%
John F. Lewis (7) -- 266,667 *
All officers and directors as
a group (5) 1,200,000 1,333,334 8.7%
</TABLE>
* Less than 1%
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(1) Except as otherwise indicated, the persons named in the table have sole
voting and investment power with respect to the shares of Common Stock shown
as beneficially owned by them, subject to community property laws where
applicable. Beneficial ownership as reported in the above table has been
determined in accordance with Rule 13d-3 of the Securities Exchange Act of
1934, as amended (the "Exchange Act"). The percentages are based upon
27,910,217 shares outstanding except with respect to certain persons who
hold presently exercisable options to purchase shares. The percentage for
each person who holds presently exercisable options is based upon the sum of
27,910,217 shares outstanding plus the number of shares subject to presently
exercisable options held by such person.
(2) According to a Schedule 13D filed with the Company, Mercury Asset
Management plc. ("MAM") manages investments for its clients and the
securities indicated are held solely for the accounts of such clients. With
respect to 3,267,200 of the shares held on behalf of a unit trust, a wholly-
owned subsidiary of MAM, as manager of the trust, has power to vote the
shares. MAM has the power to sell the shares for the benefit of the trust.
With respect to the remainder of the shares, MAM has dispositive power, but
not voting power, subject to its clients' guidelines. MAM does not admit
that it is the beneficial owner of any of the indicated shares.
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(3) As required by the Securities and Exchange Commission, this column
includes shares available under exercisable options /warrants as well as
shares that may be acquired within 60 days of April 29, 1998, upon exercise
of options/warrants.
(4) Excludes 566,667 unexercisable shares held under option.
(5) Excludes 133,333 unexercisable shares held under warrant.
(6) Excludes 133,333 unexercisable shares held under warrant.
(7) Excludes 133,333 unexercisable shares held under warrant.
ITEM 13. CERTAIN RELATIONSHIP AND RELATED TRANSACTIONS
In order to access capital with which to provide advance funding
services to a new customer, the Company completed an Assignment and Agency
Agreement on January 31, 1997 (the "Agreement") with Messrs. McConnell and
Bumgarner, members of the Company's Board of Directors. Under the Agreement,
the Company assigned certain rights under a Medical Claims Purchase Contract
between the Company and its customer to Messrs. McConnell and Bumgarner.
Messrs. McConnell and Bumgarner provided the Company with $127,327 in funds,
which the Company in turn used to advance fund certain eligible receivables
of one of its customers. During 1997, funds provided by Mr. Bumgarner were
repaid by the Company in full. At December 31, 1997, the Company continued
to carry a liability of $78,961 to Dr. McConnell in its capacity as the agent
of Dr. McConnell. Return of these funds to Dr. McConnell is based upon mutual
agreement or termination of the underlying agreement between the Company and
Dr. McConnell.
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SIGNATURES
PURSUANT TO THE REQUIREMENT OF SECTION 13 OR 15 (D) OF THE SECURITIES
EXCHANGE ACT OF 1934, THE REGISTRANT HAS DULY CAUSED THIS REPORT TO BE SIGNED
ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO DULY AUTHORIZED.
United Medicorp, Inc.
Date: April 29, 1998 By: /s/ Peter W. Seaman
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PETER W. SEAMAN,
CHAIRMAN OF THE BOARD AND CHIEF EXECUTIVE OFFICER
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES EXCHANGE ACT OF 1934,
THIS REPORT HAS BEEN SIGNED BELOW BY THE FOLLOWING PERSONS ON BEHALF OF THE
REGISTRANT AND IN THE CAPACITIES AND ON THE DATES INDICATED.
Signature Title Date
--------- ----- ----
/s/ Peter W. Seaman Chairman of the Board and April 29, 1998
---------------------------- Chief Executive Officer
PETER W. SEAMAN (Principal Executive
Officer)
/s/ R. Kenyon Culver Vice President and Chief April 29, 1998
---------------------------- Financial Officer
R. KENYON CULVER (Principal Financial
Officer and Principal
Accounting Officer)
/s/ Michael P. Bumgarner Director April 29, 1998
----------------------------
MICHAEL P. BUMGARNER
/s/ John F. Lewis Director April 29, 1998
----------------------------
JOHN F. LEWIS
/s/ Thomas H. McConnell, III Director April 29, 1998
----------------------------
THOMAS H. MCCONNELL, III
10
