<PAGE> 1
U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
[X] Quarterly Report Under Section 13 or 15(d) of the Securities Exchange
Act of 1934 for the Quarterly Period Ended March 31, 1996
[ ] Transition Report Pursuant to Section 13 or 1 5(d) of the Securities
Exchange
Act of 1934
Commission File Number 33-30677-NY
AMERICAN HEALTHCHOICE, INC.
(Exact Name of Registrant as Specified in Its Charter)
New York 11-2948752
(State of Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
1300 W. Walnut Hill Lane, Ste. 275
Irving, Texas 75038
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including are code: (214) 751-1900
(Former name, former address and former fiscal year, if changed since last
report)
Indicate by checkmark whether the registrant (1 ) filed all reports
required to be filed by Section 13 or 1 5(d) of the Exchange Act during the
past 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 .
--- ---
On March 31, 1996, there were outstanding 6,690,001 shares of the
Company's common stock, par value $.001 per share.
Transitional Small Business Issuer Disclosure Format: Yes No X
--- ---
<PAGE> 2
AMERICAN HEALTHCHOICE, INC.
QUARTERLY REPORT ON FORM 10-QSB FOR
QUARTER ENDED, MARCH 31, 1996
INDEX
<TABLE>
<CAPTION>
PAGE
PART I. FINANCIAL INFORMATION NUMBER
- - ----------------------------- ------
<S> <C>
ITEM 1. Unaudited Financial Statements
Consolidated Balance Sheet . . . . . . . . . . . . . . . . . . . . . . 3
Consolidated Statements of Operations . . . . . . . . . . . . . . . . . 4
Consolidated Statements of Stockholders' Equity . . . . . . . . . . . . 5
Consolidated Statements of Cash Flows . . . . . . . . . . . . . . . . . 6
Notes to Consolidated Financial Statements . . . . . . . . . . . . . . 7
ITEM 2. Management's Discussion and Analysis of Results of Operation . . . . . 8
PART II. OTHER LNFORMATION
- - --------------------------
ITEM 1. Legal Proceedings . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
ITEM 2. Changes in Securities . . . . . . . . . . . . . . . . . . . . . . . . 12
ITEM 3. Defaults Upon Senior Securities . . . . . . . . . . . . . . . . . . . . 12
Item 4. Submission of Matters to Vote of Securities Holders . . . . . . . . . . 12
ITEM 5. Other Information . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
ITEM 6. Exhibits and Reports on Form 8-K . . . . . . . . . . . . . . . . . . . 12
SIGNATURES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
- - ----------
</TABLE>
2
<PAGE> 3
PART I
ITEM I. FINANCIAL INFORMATION
AMERICAN HEALTHCHOICE, INC.
AND SUBSIDIARIES
(UNAUDITED)
CONSOLIDATED BALANCE SHEET
MARCH 31,1996
<TABLE>
<CAPTION>
ASSETS 1996
------
<S> <C>
CURRENT ASSETS:
Cash $ 553,162
Accounts receivable, less allowance for
doubtful accounts of $2,929,452 8,582,482
Advances due from an affiliate and stockholders 403,709
Advances to physicians 26,667
Other receivables 388,010
Other current assets 138,878
-----------
TOTAL CURRENT ASSETS 10,092,908
-----------
LAND 120,000
FURNITURE, FIXTURES AND EQUIPMENT, NET 1,095,434
GOODWILL, NET 1,805,267
OTHER ASSETS 195,896
-----------
TOTAL ASSETS $13,309,505
===========
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
CURRENT LIABILITIES:
Current portion of notes $ 639,207
Current portion of capital lease obligations 112,094
Advances from stockholders 147,094
Accrued payroll and payroll taxes 146,402
Accounts payable and accrued expenses 540,907
Income taxes payable 783,536
Deferred income taxes 1,968,000
-----------
TOTAL CURRENT LIABILITIES 4,337,240
-----------
NOTES PAYABLE, less current portion 1,196,243
CAPITALIZED LEASE OBLIGATIONS, less current portion 285,171
COMMITMENTS (Note 5)
STOCKHOLDERS' EQUITY:
Preferred stock, $.001 par value; 5,000,000 shares authorized;
none issued --
Common stock, $.001 par value; 115,000,000 shares authorized;
6,690,001 shares issued and outstanding 6,690
Additional paid-in capital 4,263,963
Retained earnings 3,220,198
-----------
Total stockholders' equity 7,490,851
-----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $13,309,505
===========
</TABLE>
See accompanying notes to these unaudited interim condensed consolidated
financial statements.
3
<PAGE> 4
AMERICAN HEALTHCHOICE, INC.
AND SUBSIDIARIES
(UNAUDITED)
CONSOLITATED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
Six Months
Ended March 31
1995 1996
--------- ---------
<S> <C> <C>
NET PATIENT REVENUES 2,971,939 5,984,486
OPERATING EXPENSES:
Compensation and benefits 848,991 1,988,267
Advertising 200,339 323,028
Depreciation and amortization 30,280 47,459
General and administrative 655,360 1,996,060
--------- ---------
Total operating expenses 1,734,970 4,354,814
--------- ---------
Income before income taxes and
pro forma income taxes 1,236,969 1,629,672
INCOME TAXES:
Current 212,626 580,661
Deferred 721,982 --
--------- ---------
934,608 580,661
NET INCOME BEFORE PRO FORMA INCOME TAXES 302,361 1,049,011
Pro forma income tax expense (benefit) 471,000 --
--------- ---------
NET INCOME AFTER PRO FORMA INCOME TAXES 773,361 1,049,011
--------- ---------
NET INCOME PER SHARE AFTER PRO FORMA
INCOME TAXES $ 0.14 $ 0.18
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING 5,437,000 5,935,500
</TABLE>
See accompanying notes to these unaudited interim condensed consolidated
financial statements.
4
<PAGE> 5
AMERICAN HEALTHCHOICE, INC.
AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
PERIOD ENDING MARCH 31, 1996
<TABLE>
<CAPTION>
Common Stock
------------------------ Additional
Obtion/Sub. Paid-in Retained
Shares Amount Fee/Payable Capital Earnings Total
----------- --------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
BALANCES, OCTOBER 1, 1993 2,847,000 $ 28,470 $ 32,780 $ 2,281,330 $ 2,342,580
Issuance of common stock to
founders for services rendered
during fiscal 1993 803,000 8,030 72,416 -- 80,446
Net income -- -- -- -- 981,684 981,684
Dividends -- -- -- -- (356,624) (356,624)
----------- --------- ----------- ----------- ----------- -----------
BALANCES, SEPTEMBER 30, 1994 3,650,000 36,500 105,196 2,906,390 3,048,086
Reclassification of retained
earnings to additional paid-in
capital upon conversion of
selected subsidiaries from
non-taxable to taxable entities -- -- -- 1,260,479 (1,260,479) --
Exchange of common stock
In connection with the
Acquisition of Paudan, Inc. 1,787,000 (31,063) -- 231,064 -- 200,001
Common stock to be issued in
connection with the acquisition
of Peachtree Corners Medical
Center -- -- 75,000 -- -- 75,000
Net income -- -- -- -- 649,167 649,167
----------- --------- ----------- ----------- ----------- -----------
BALANCES, SEPTEMBER 30, 1995 5,437,000 $ 5,437 $ 75,000 $ 1,596,739 $ 2,295,078 $ 3,972,254
=========== ========= =========== =========== =========== ===========
Net income 391,425 391,425
Issuance of stock in connectin with
acquisition of Peachtree Corners
Medical Center 25,000 25 (75,000) 74,975 -- --
Issuance of stock in connection with
acquisitin of Valley Family Health, Inc. 360,000 360 -- 809,640 -- 810,000
Issuance 100,000 shares of common
stock at $2.00 100,000 100 -- 199,900 -- 200,000
Issuance 711,111 shares common
stock at $2.25 711,111 711 -- 1,354,764 -- 1,355,475
Issuance 56,890 shares common
stock at $2.25 56,890 57 -- 127,945 -- 128,002
Option fee paid -- -- 100,000 100,000
Net income 3/31/96 533,695 533,695
----------- --------- ----------- ----------- ----------- -----------
BALANCES, MARCH 31, 1996 6,690,001 6,690 100,000 $ 4,163,963 $ 3,220,198 $ 7,490,851
=========== ========= =========== =========== =========== ===========
</TABLE>
5
<PAGE> 6
AMERICAN HEALTHCHOICE, INC.
AND SUBSIDIARIES
(UNAUDITED)
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
Six Months Ended March 31
1995 1996
------------ ------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
NET INCOME: $ 302,361 $ 1,049,012
Adjustments to reconcile net income to cash from operating activities:
Depreciation and amortization 30,280 47,458
Change in assets and liabilities:
Increase in trade accounts receivable, net (872,966) (3,396,950)
Increase in prepayments (245,468) --
Increase in deferred taxes 721,980 36,000
Increase in income taxes payable 137,499 622,536
Decrease in accounts payable -- 351,042
Increase (decrease) in accrued payroll and payroll taxes 42,587 (124,116)
Increase in accounts payable 27,057 --
Decrease in other assets (58,419) (106,060)
Net cash provided by operating activities 84,911 (1,521,078)
------------ ------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Cash acquired upon acquisition of Paudan, Inc.
Cash acquired in Peachtree acquisition
Amounts paid to acquire Peachtree
Purchase of medical practice -Metropolitan -- (966,533)
-Valley Family Health -- (319,785)
Increase in advances to physicians and other receivables
Purchases of furniture, equipment, and land (36,980) (674,849)
Proceeds received on advances to employees, net -- --
Decrease in advance from stockholder (66,749) --
------------ ------------
Net cash provided by (used in) investing activities (103,729) (1,961,167)
------------ ------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from sale and leaseback of fixed assets -- --
Proceeds from note payable -- 896,243
Cash advances from (to) stockholders, net -- --
Sale of stock -- 2,593,477
------------ ------------
Net cash provided by financing activities -- 3,489,720
------------ ------------
DECREASE/INCREASE IN CASH (18,818) 7,475
------------
CASH, beginning of period 267,815 545,687
------------ ------------
CASH, end of period $ 248,997 $ 553,162
============ ============
</TABLE>
See accompanying notes to these unaudited interim condensed consolidated
financial statements.
6
<PAGE> 7
AMERICAN HEALTHCHOICE, INC.
AND SUBSIDIARIES
(UNAUDITED)
Notes To Condensed, Consolidated Financial Statements
Note (1) The Company.
American HealthChoice, Inc. was formed on September 14, 1989 in the State of
New York. Pursuant to an agreement dated March 31, 1995. American HealthChoice,
Inc. acquired all of the assets of American HealthChoice (Delaware) Inc. by
issuing 5,062,000 shares of Common Stock par value $0.001. The purchase was
acquired for a reverse acquisition using the purchase method of accounting.
Note (2) Condensed Financial Statements.
The accompanying unaudited financial information has been prepared by American
HealthChoice, Inc. (or the "Company") in accordance with the instructions to
Form 10-QSB. The information furnished reflects all adjustments, all of which
were of a normal recurring nature, which are, in the opinion of the Company,
necessary for a fair presentation of results for the interim periods presented.
Although the Company believes that the disclosures are adequate to make the
information presented not misleading, certain information and footnote
disclosures, including significant accounting policies, normally included in
financial statements prepared in accordance with generally accepted accounting
principles have been condensed or omitted pursuant to such rules and
regulation. It is suggested that the financial information be read in
conjunction with the financial statements and notes thereto included in the
Company's Form 10KSB dated September 30, 1995.
Note (3) Summary of Significant Accounting Policies.
Net Patient Revenues - Revenue is recognized upon performance of services.
Substantially all of the Company's revenues are derived from personal injury
claims and claims filed on major medical policies, worker's compensation
policies, Medicare or Medicaid. Allowances for doubtful accounts are maintained
at levels considered appropriate by management based upon historical charge-off
experience and other factors deemed pertinent by management.
Furniture and Equipment - Furniture and equipment are stated at cost less
accumulated depreciation. Depreciation is provided over the estimated useful
lives of the related assets of five years, primarily using accelerated methods.
Net Income Per Share - Net income per share for each period is based upon the
weighted average number of common shares outstanding during the period,
excluding all shares placed in escrow.
Note (4) Acquisitions.
The Company acquired the stock of Valley Family Health, L.L.C. effective,
January 1, 1996. All amounts in the Company's unaudited financial statements
have been adjusted to reflect the results under the Pooling of Interests
method.
Note (5) Commitments.
The Company's principal administrative office located in Irving, Texas is
occupied on a month to month basis at monthly rental of $2,200.00. The Company
also leases, subleases or occupies pursuant to various agreements the clinic
facilities of affiliated physicians. The leases have varying terms ranging from
month to month to five (5) years with monthly rents from $1,100.00 to
$17,500.00. The Company believes that as affiliated practices grow and add
services additional and expanded facilities may be required.
7
<PAGE> 8
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations.
The following discussion of the results of operations and financial condition
of the Company should be read in conjunction with the Company's Consolidated
Financial Statements and notes thereto included elsewhere in this document.
American HealthChoice, Inc. acquires at fair market value the furniture,
fixtures and equipment and an estimated net value of the accounts receivable of
existing medical practices. The Company has unilateral control over the assets
and operations of the various medical practices. The Company's financial
relationship with each practice offers the physician an opportunity to earn a
level of compensation commensurate with the marketplace, but usually less than
that which the physician earned prior to the affiliation, while giving the
practices access to capital, management expertise, information systems, and
managed care contracts. The revenue after acquisition received by the employed
physician is determined by an in-depth evaluation of the financial records of
the practice typically up to three years prior to affiliation.
American HealthChoice, Inc. manages all aspects of the clinic other than the
provision of medical services which is controlled by the employed or contracted
physician groups.
ACQUISITIONS AND NEW BUSINESSES:
During the quarter ending March 31, 1996 the Company made two acquisitions. The
Company acquired in a stock for stock transaction all the shares of Valley
Family HealthCare, L.L.C. located in McAllen, Texas. This clinic located in
McAllen Texas provides chiropractic services with estimated annual gross
services of $1,750,000.00. The Company issued 360,000 shares of Common Stock
par value $0.001 per share at $2.25 per share for an acquisition value of
$810,000.00. The acquisition closed January 1, 1996 and has been accounted for
in the financial statements under the Pooling method.
The second acquisition was the assets of four individual clinics formerly
associated with Metropolitan HealthCare, Inc. a Company based in Atlanta,
Georgia. The Company closed the transaction on February 29, 1996 for
approximately $1,395,000.00 represented by the assumption of various accounts
payable, notes payable to physicians with terms from 15 months to five years.
As a result of this transaction on an annual basis the Company estimates annual
gross revenues will be increased by $3,100,000. Goodwill of $936,997 will be a
result from this acquisition and will be amortized over 40 years.
In addition, the Company in late March completed the construction of clinic
improvements at Brownsville and commenced the operation of a chiropractic
clinic within the site. This start up operation will require working capital
from the Company until a cash breakeven is reached in approximately six (6)
months.
The Company's profitability depends on enhancing clinic operating efficiency,
expanding health care services provided, increasing market share, and assisting
affiliated physicians in managing the delivery of medical care. The Company
does not charge management fees for managing the operations of the clinics.
As of April 30, 1996, the Company owned 18 clinic sites in three states; Texas,
Louisiana and Georgia. The following chart details the clinics' locations,
metropolitan areas served, services provided and date acquired by the Company.
<TABLE>
<CAPTION>
Number
Metropolitan Of Date
Clinic Location Area Served Services Provided Providers Acquired
------ -------- ----------- ----------------- --------- --------
<S> <C> <C> <C> <C> <C>
Alpha Medical Clinic San Antonio, TX San Antonio primary medical care 1 12/95
Nationwide Sports & Katy, TX Houston physical therapy and 2 10/94
Injury/United Chiropractic chiropractic
Nationwide Sports & Bandera, TX San Antonio physical therapy and 2 07/94
Injury/United Chiropractic chiropractic
Nationwide Sports & San Pedro, TX San Antonio physical therapy and 2 10/94
Injury/United Chiropractic chiropractic
Nationwide Sports & Wurzbach, TX San Antonio physical therapy and 2 10/94
Injury/United Chiropractic chiropractic
</TABLE>
8
<PAGE> 9
<TABLE>
<S> <C> <C> <C> <C> <C>
Peachtree Corners Atlanta, GA Atlanta primary medical 9 09/95
Medical Center care, urgent care
Internal Medicine Atlanta, GA Atlanta internal medicine 1 02/96
Associates
San Pedro Family Clinic San Antonio, TX San Antonio primary medical 1 10/94
South Bexar Clinic San Antonio, TX San Antonio primary medical and 1 01/96
urgent care
South Cross Minor San Antonio, TX San Antonio urgent care, primary 1 12/95
Emergency Clinic medical care
Southmost Primary Brownsville, TX Rio G. Valley primary medical care 2 10/95
Care Clinic urgent care
United Chiropractic New Orleans, LA New Orleans chiropractic 1 07/94
Broad Street
United Chiropractic New Orleans, LA New Orleans chiropractic 1 07/94
Uptown
Peachtree Medical Atlanta, GA Atlanta internal medicine 1 02/96
Center of Northside
Peachtree Medical Atlanta, GA Atlanta internal medicine 1 02/96
Center of Windy Hill
Peachtree Medical Atlanta, GA Conyer primary medical care 2 02/96
Center of Conyers
Peachtree Medical Atlanta, GA McDonough primary medical care 2 02/96
Center of McDonough
McAllen Family Health McAllen, TX McAllen chiropractic 1 01/96
</TABLE>
RESULTS OF OPERATIONS:
For the six months ended March 31, 1996, net revenues were $5,984,486 compared
to $1,971,939 for the same period in 1995. This increase reflects the increase
in net revenues to the Company from the acquisitions completed for the period
and other new clinics started during the period ending March 31, 1996. During
the period March 31, 1996, there continued to be a reduction in operations at
the New Orleans East Clinic based on changes to the clinic's market
demographics and reimbursement policies of third-party payors. These changes
also affected the revenues of the mobile diagnostic service. These changes
reflected in a reduction in net revenue or $350,000 for the six months ending
March 31, 1996 compared to the same period in 1995. The increase in operating
costs in 1996 were the result of increased activity within the Company as new
clinics were acquired and started up, in particular, the higher cost of
operating medical clinics.
The Company's operations are labor intensive with salaries and benefits
comprising the single largest item in operations. Payroll costs increased from
$848,991 in 1995 to $1,988,267 in 1996 as the result of increased cost of
physicians and the addition of new operating units and increased cost of
remuneration resulting from increased market demand for physicians. During the
period the Company has continued its transformation from chiropractic services
to an equal balance of medical, however this has had a significant impact on
the profitability of the Company given the different profit margin between the
two sectors. The operating costs of physician practices acquired in September
1995 and throughout the reporting period are considerably higher than expected
by approximately $400,000. The Company intends to adjust the number of
employees at each site and to renegotiate physician contracts to establish a
more acceptable level of physician and staff costs in relation to revenues
produced.
Increases in revenue for the period resulted primarily from clinics acquired
during the period. Revenue from Valley Family Health offset approximately
$350,000 of revenue lost on the reduced operations at New Orleans East clinic
in 1996 compared to 1995.
9
<PAGE> 10
The Company anticipates that it takes approximately 6 months before it can
begin significantly adjusting the operations of any acquired site in such a way
not to disrupt physicians and patient care. This is reflected in the average
operating margins of the medical services division of approximately 5% of gross
services to approximately 35% of gross services for chiropractic. The Company's
operating objectives seek an operating profit of 15% for its medical clincs.
Failure to meet these objectives has resulted in the Company's net
profitability being reduced an estimated $200,000 for the period.
LIQUIDITY AND CAPITAL RESOURCES:
As of March 31, 1996, the Company had working capital of $5,655,619 and of
$3,168,962 at March 31, 1995. Because of the Company's continued acquisition
strategy and conversion of accounts receivable to the Company's systems, there
can be no assurance that this important element of cash flow will improve in
the near future. On a monthly basis, the Company's most significant expenditure
is for physician costs.
The Company is dependent on the revenues from its existing clinics to fund the
Company's working capital requirements, including the payment of approximately
$2,000,000 of installment financing associated with the acquisition of its
existing clinics over the next five years. In the event of unanticipated
problems, including higher than expected costs of operation of the
Company-owned clinics and anticipated revenues prove to be insufficient to fund
operations, the Company would be required to raise additional equity, engage in
debt financing or cease or curtail its activities.
During the quarter ending March 31, 1996, the Company completed two private
placements. The first was the issue 100,000 shares of Common Stock at $0.001par
value at $2.00 per share. These shares are subject to a 12 month lock-up
agreement and in accordance with the terms of this transaction Mr. Ronald Potts
was appointed to the Board of Directors beginning April 1996. There was no
sales commissions applicable to this transaction. The second private placement
resulted in the issue of 711,111 shares of Common Stock $0.001 par value at
$2.25 per share. The Company issued an additional 56,900 shares of Common Stock
par value $0.001 to the Agent as sales commission relating to this placement.
In addition the Company paid $112,522.56 in cash sales commissions and non
accountable expense allowances. The net proceeds to the Company of these two
placements was $1,487,211.
None of the Common Stock offered pursuant to each of the Private
Placements has been registered under federal or state securities laws and is
being offered and sold in reliance on exemptions from such registration
requirements and such laws. In the second placement the share purchasers agreed
that the shares will not, without the prior written consent of G-V Capital
Corp, the exclusive placement agent for the Company (the "Placement Agent"),
which consent may be withheld or denied in the Placement Agent's sole and
absolute offer for sale, sell, sell short, "short against the box", grant
any option, right to warrant with respect to, or otherwise dispose of (or
announce any intention to undertake any of the foreging) all or any of the
Shares purchased in the Offereing or any other shares of Common Stock of the
Company until the earlier of (i) twelve (12) months after the Closing Date, or
(ii) such time as the Shares have been registered for sale pursuant to the
Securities Act of 1933, as ammended. As of the April 30, 1996 the Company had
not met its obligation to effectuate a registration statement in respect of
these shares.
The Company entered into an agreement with an investment group whereby the
group was granted four (4) options to acquire the Common Stock of American
HealthChoice, Inc. Under the following summarized terms.
<TABLE>
<CAPTION>
Payable 10 Non-Refundable Total Lowest
Days From Option Fee, Cre- Exercise Possible
Closing + dited To Price Price (i.e., Exercise
90 Days Each Upon Exercise before credit) Price/Share
------------ --------------- --------------- -----------
<S> <C> <C> <C>
March 18, 1996 $ 100,000 $ 750,000 $ 2.25
June 18, 1996 $ 100,000 $ 750,000 $ 3.00
September, 1996 $ 100,000 $ 750,000 $ 3.00
December 1996 $ 100,000 $ 750,000 $ 3.00
--------- ----------- ------
Totals $ 400,000 $ 3,000.000
</TABLE>
Options 2,3 & 4 are (a) exercisable only at the greater price of $4.90 per
share if purchased on or before September 18, 1996, and thereafter 30% below
market price on date of exercie, unless exercised within six months of closing
of AHI/MHI asset purchase, in which case the exercise and (b) exercisable within
24 months of the date each Option payment is made; if any option payment not
made then subsequent opetions are forefeited (i.e., not affecting any
previously funded optins. Until registration, if any, these shares are Rule 144
shares. Shares bought, if any, by the time of AHI's SEC registration statemetn
filing for the March 1996 private placement shall be registered for trading,
subject to 12 month "lock-up" until registration; shares bought thereafter
shall have
10
<PAGE> 11
"piggyback" registration rights for AHI's next registration following the
exercise date of the Option(s) with a 12 month "lock-up" as to at least 50% of
said exercised shares.
The Company generally acquires clinics by cash payment, installment
purchase financing and the issue of Common Stock of the Company. The Company
then relies on increases in the revenues or decreases in the operating costs of
such acquired clinics, or a combination thereof, in order to repay such
installment financing of these clinics from cash flow. There is not assurance
the Company will be able to achieve these goals or that the cash flow generated
from the acquired clinics will be sufficient to meet the revenues were not
sufficient to make the required payments, the Company would be required to
raise additional equity or borrow funds from banks or other lenders or risk
defaulting on its installment financing obligations.
Balance of page left blank intentionally
11
<PAGE> 12
PART II
OTHER INFORMATION
ITEM 1. Legal Proceedings
Not Applicable
ITEM 2. Changes in Securities
Not Applicable
ITEM 3. Defaults Upon Senior Securities
Not Applicable
ITEM 4. Submission of Matters to Vote
of Security Holders
None
ITEM 5. Other Information
Not Applicable
ITEM 6. Exhibits and Reports on Form 8-K
There have been no reports on Form 8-K
filed during the quarter for which this
report on Form 10-Q is being filed.
12
<PAGE> 13
SIGNATURE
In accordance with 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, thereunto duly authorized.
American HealthChoice, Inc.
(Registrant)
Date: May 20, 1996 By: /s/ Dr. Joseph Wesley Stucki, D.C.
-----------------------------------------
Dr. Joseph Wesley Stucki, D.C.
Chairman of the Board
and President
By: /s/ Michael J. Dare
-----------------------------------------
Michael J. Dare
Vice President Operations
13
<PAGE> 14
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- - ------- -----------
<S> <C>
27 - Financial Data Schedule
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> SEP-30-1996
<PERIOD-START> OCT-01-1995
<PERIOD-END> MAR-31-1996
<CASH> 553,162
<SECURITIES> 0
<RECEIVABLES> 11,911,934
<ALLOWANCES> 8,582,482
<INVENTORY> 70,500
<CURRENT-ASSETS> 9,992,908
<PP&E> 1,594,241
<DEPRECIATION> 507,744
<TOTAL-ASSETS> 13,309,505
<CURRENT-LIABILITIES> 4,337,240
<BONDS> 0
<COMMON> 6,690
0
0
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 13,309,505
<SALES> 5,984,486
<TOTAL-REVENUES> 5,984,486
<CGS> 4,354,814
<TOTAL-COSTS> 4,354,814
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 1,629,672
<INCOME-TAX> 580,661
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<NET-INCOME> 1,049,011
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<EPS-DILUTED> 0.18
</TABLE>
