<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K/A
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): October 2, 1998
HEALTHCARE IMAGING SERVICES, INC.
---------------------------------
(Exact name of registrant as specified in its charter)
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<CAPTION>
<S> <C> <C>
Delaware 000-19636 22-3119929
---------- ----------- -------------
(State or other jurisdiction (Commission File Number) (IRS Employer
of incorporation) Identification No.)
======================================= ====================================== ======================================
</TABLE>
200 Schulz Drive, Red Bank, New Jersey 07701
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (732) 224-9292
NOT APPLICABLE
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(Former name or former address, if changed since last report)
<PAGE>
This Form 8-K/A, Amendment Number 1, amends and supplements the Form
8-K (the "Original Form 8-K") filed by HealthCare Imaging Services, Inc. (the
"Company") on October 16, 1998 in connection with the Company's acquisition of
substantially all of the assets and properties of Echelon MRI, P.C., Mainland
Imaging Center, P.C., North Jersey Imaging Management Associates, L.P.,
Bloomfield Imaging Associates, P.A. and Irving N. Beran, M.D., P.A.
(collectively the "Beran Entities") that pertain to three (3) diagnostic
imaging facilities, one radiology/x-ray/ultrasound facility and certain other
radiology facilities operated by the Beran Entities. The Unaudited Pro Forma
Financial Information relating to such acquisition is filed herewith as Item
7(b) to the Original Form 8-K.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(b) Pro Forma Financial Information.
1. Pro Forma Consolidated Condensed Balance Sheets as of
June 30, 1998.
2. Pro Forma Consolidated Condensed Statements of Operations
as of June 30, 1998.
3. Pro Forma Consolidated Condensed Statements of Operations
for the year ended December 31, 1997.
4. Notes to Pro Forma Consolidated Condensed Financial
Statements.
2
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
HEALTHCARE IMAGING SERVICES, INC.
(Registrant)
Dated: November 11, 1998 By: /s/ Elliott H. Vernon
---------------------
Elliott H. Vernon
Chairman of the Board, President
and Chief Executive Officer
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PRO FORMA CONSOLIDATED CONDENSED BALANCE SHEETS (A):
- ----------------------------------------------------
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<CAPTION>
IRVING N.
BERAN, M.D.,
PA. AND
COMPANY AFFILIATES PRO FORMA
HISTORICAL HISTORICAL PRO FORMA CONSOLIDATED
ASSETS JUNE 30, 1998 JUNE 30, 1998 ADJUSTMENTS JUNE 30, 1998
- ------ ------------- ------------- ----------- -------------
<S> <C> <C> <C> <C>
CURRENT ASSETS
Cash and cash equivalents $ 113,326 $ 1,435,555 $ (1,435,555) (B) $ 113,326
Accounts receivable - net 6,283,207 5,717,996 663,245 (C) 12,664,448
Prepaid expenses and other 180,807 100,177 (100,177) (B) 180,807
Loans receivable - 18,658 (18,658) (B)
2,500,000 (D) 2,500,000
Deferred tax asset - 271,923 (271,923) (B) -
------------------ ------------------ -------------------- ---------------------
Total current assets 6,577,340 7,544,309 1,336,932 15,458,581
------------------ ------------------ -------------------- ---------------------
PROPERTY, PLANT AND EQUIPMENT - Net 5,181,600 2,848,245 893,405 (A) 8,923,250
------------------ ------------------ -------------------- ---------------------
OTHER ASSETS:
Advances to licensee 126,225 - - 126,225
Goodwill - net 1,634,790 - 10,595,105 (D)
155,636 (E)
302,993 (F)
703,125 (G) 13,391,649
Due from officer 264,125 - - 264,125
Other assets 733,265 331,987 (331,987) (B)
(155,636) (E)
150,000 (H)
343,020 (I) 1,070,649
------------------ ------------------ -------------------- ---------------------
Total other assets 2,758,405 331,987 11,762,256 14,852,648
------------------ ------------------ -------------------- ---------------------
TOTAL ASSETS $ 14,517,345 $ 10,724,541 $13,992,593 $ 39,234,479
================== ================== ==================== =====================
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Borrowings under revolving line
of credit $ 1,645,269 $ - $ - $ 1,645,269
Accounts payable and accrued
expenses 1,473,193 303,214 (303,214) (B)
302,993 (F)
150,000 (H) 1,926,186
Current portion of long-term debt
and capital lease obligations 1,538,903 421,274 (421,274) (B)
14,000,000 (D) 15,538,903
Note payable - officer - 595,401 (595,401) (B) -
Income taxes payable 9,094 4,322,591 (4,322,591) (B) 9,094
------------------ ------------------ -------------------- ---------------------
Total current liabilities 4,666,459 5,642,480 8,810,513 19,119,452
------------------ ------------------ -------------------- ---------------------
NONCURRENT LIABILITIES:
Long-term debt and capital
lease obligations 2,652,259 1,012,612 (1,012,612) (B) 2,652,259
Reserve for restructuring costs 262,439 - - 262,439
Deferred income taxes - 1,533,793 (1,533,793) (B) -
------------------ ------------------ -------------------- ---------------------
Total noncurrent liabilities 2,914,698 2,546,405 (2,546,405) 2,914,698
------------------ ------------------ -------------------- ---------------------
------------------ ------------------ -------------------- ---------------------
MINORITY INTEREST 708,158 467,270 (467,270) (B) 708,158
------------------ ------------------ -------------------- ---------------------
STOCKHOLDERS' EQUITY:
Preferred stock - Series C 2,150 - - 2,150
Preferred stock - Series D - - 88 (D) 88
Common stock 104,565 3,100 (3,100) (B)
7,500 (G) 112,065
Additional paid-in capital 12,699,333 429,250 (429,250) (B)
9,217,908 (D)
695,625 (G)
343,020 (I) 22,955,886
Accumulated deficit (6,578,018) 1,636,036 (1,636,036) (B) (6,578,018)
------------------ ------------------ -------------------- ---------------------
Total stockholders' equity 6,228,030 2,068,386 8,195,755 16,492,171
------------------ ------------------ -------------------- ---------------------
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY $ 14,517,345 $ 10,724,541 $ 13,992,593 $ 39,234,479
================== ================== ==================== =====================
</TABLE>
SEE NOTES TO PRO FORMA CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
<PAGE>
PRO FORMA CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS (A):
<TABLE>
<CAPTION>
IRVING N.
BERAN, M.D.,
P.A. AND
COMPANY AFFILIATES PRO FORMA
HISTORICAL HISTORICAL PRO FORMA CONSOLIDATED
JUNE 30, 1998 JUNE 30, 1998 ADJUSTMENTS JUNE 30, 1998
------------------- ------------------- ---------------------- ------------------
<S> <C> <C> <C> <C>
REVENUES $ 6,502,654 $ 5,044,102 $ 663,245 (C) $ 12,210,001
------------------- ------------------- ---------------------- ------------------
OPERATING EXPENSES:
Salaries 1,689,704 1,463,699 103,000 (J) 3,256,403
Other operating expenses 1,479,333 851,606 12,360 (J) 2,343,299
Provision/(recovery) of
bad debts - - - -
Films and supplies 271,875 127,525 - 399,400
Equipment maintenance and
repairs 267,513 312,536 - 580,049
Consulting and marketing fees 374,200 - - 374,200
Professional fees 251,764 55,775 (43,275) (K) 264,264
Depreciation and amortization 850,245 520,072 383,262 (L) 1,753,579
Interest 387,449 57,668 (57,668) (M)
128,571 (H)
294,017 (I)
840,000 (N)
(100,000) (O) 1,550,037
Gain on sale of equipment (151,767) - - (151,767)
------------------- ------------------- ---------------------- ------------------
Total operating
expenses 5,420,316 3,388,881 1,560,267 10,369,464
------------------- ------------------- ---------------------- ------------------
INCOME BEFORE MINORITY INTERESTS
IN JOINT VENTURES AND INCOME
TAXES 1,082,338 1,655,221 (897,022) 1,840,537
MINORITY INTERESTS IN JOINT
VENTURES (247,720) (187,551) 187,551 (P) (247,720)
------------------- ------------------- ---------------------- ------------------
INCOME BEFORE INCOME TAXES 834,618 1,467,670 (709,471) 1,592,817
INCOME TAX PROVISION 19,486 733,751 (733,751) (Q) 19,486
------------------- ------------------- ---------------------- ------------------
NET INCOME $ 815,132 $ 733,919 24,280 1,573,331
=================== ===================
PREFERRED DIVIDENDS 414,810 (R) 414,810
---------------------- ------------------
NET INCOME AVAILABLE TO COMMON
SHAREHOLDERS $ (390,530) $ 1,158,521
====================== ==================
NET INCOME PER COMMON SHARE
NET INCOME PER COMMON SHARE -
BASIC $ 0.08 $ 0.11
=================== ==================
WEIGHTED AVERAGE COMMON
SHARES OUTSTANDING - BASIC 10,096,963 10,846,963
=================== ==================
NET INCOME PER COMMON SHARE -
DILUTED $ 0.07 $ 0.07
=================== ==================
WEIGHTED AVERAGE COMMON
SHARES OUTSTANDING - DILUTED 11,366,540 23,569,154
=================== ==================
</TABLE>
See Notes to Pro Forma Consolidated Condensed Financial Statements
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PRO FORMA CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS (A):
- --------------------------------------------------------------
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<CAPTION>
IRVING N.
BERAN, M.D.,
P.A., AND
COMPANY AFFILIATES PRO FORMA
HISTORICAL HISTORICAL CONSOLIDATED
DECEMBER 31, DECEMBER 31, PRO FORMA DECEMBER 31,
1997 1997 ADJUSTMENTS 1997
---- ---- ----------- ----
<S> <C> <C> <C> <C>
REVENUES $ 10,247,940 $11,314,548 $ (81,824) (S)
-------------------- --------------------
1,326,490 (C) $ 22,807,154
--------------------- --------------------
OPERATING EXPENSES:
Salaries 2,819,601 2,711,405 174,020 (J) 5,705,026
Other operating expenses 3,196,373 1,806,378 (15,437) (S)
20,542 (J) 5,007,856
Provision/(recovery) of bad debts - 245,000 - 245,000
Films and supplies 478,543 319,187 - 797,730
Equipment maintenance and repairs 619,491 515,417 - 1,134,908
Consulting and marketing fees 582,687 - - 582,687
Professional fees 538,392 178,225 (153,225) (K) 563,392
Depreciation and amortization 1,509,649 1,128,478 766,524 (L) 3,404,651
Interest 540,652 148,249 (148,249) (M)
150,000 (H)
343,020 (I)
1,680,000 (N)
(200,000) (O) 2,513,672
(Gain)/loss on disposal and abandonment (105,000) 259,120 (259,120) (T) (105,000)
Non-cash compensation charge 398,646 - - 398,646
-------------------- -------------------- --------------------- --------------------
Total operating expenses 10,579,034 7,311,459 2,358,075 20,248,568
-------------------- -------------------- --------------------- --------------------
(LOSS) INCOME BEFORE MINORITY
INTERESTS IN JOINT VENTURES AND
INCOME TAXES (331,094) 4,003,089 (1,113,409) 2,558,586
MINORITY INTERESTS IN JOINT VENTURES (430,172) (417,091) 417,091 (P) (430,172)
-------------------- -------------------- --------------------- --------------------
(LOSS) INCOME BEFORE INCOME TAXES (761,266) 3,585,998 (696,318) 2,128,414
INCOME TAX PROVISION 43,039 1,432,333 (1,432,333) (Q) 43,039
-------------------- -------------------- --------------------- --------------------
NET (LOSS) INCOME $ (804,305) $ 2,153,665 736,015 2,085,375
==================== ====================
PREFERRED DIVIDENDS 1,024,929 (R) 1,024,929
--------------------- --------------------
NET INCOME AVAILABLE TO COMMON
SHAREHOLDERS $ (288,914) $ 1,060,446
===================== ====================
NET (LOSS) INCOME PER COMMON SHARE:
NET (LOSS) INCOME PER COMMON SHARE -
BASIC $ (0.12) $ 0.15
==================== ====================
WEIGHTED AVERAGE COMMON SHARES
OUTSTANDING - BASIC 6,437,822 7,187,822
==================== ====================
NET (LOSS) INCOME PER COMMON SHARE -
DILUTED $ (0.12) $ 0.09
==================== ====================
WEIGHTED AVERAGE COMMON SHARES
OUTSTANDING - DILUTED 6,437,822 23,101,919
==================== ====================
</TABLE>
See notes to Pro Forma Consolidated Condensed Financial Statements
<PAGE>
NOTES TO PRO FORMA CONSOLIDATED CONDENSED FINANCIAL STATEMENTS:
(A) Reflects the Beran Acquisition using the purchase method of accounting.
The total purchase price for the Beran Acquisition has been preliminarily
allocated to tangible and identifiable intangible assets and liabilities
based upon management's estimate of their respective fair values with the
excess of cost over fair value of net assets acquired allocated to
goodwill. The allocation of purchase price is subject to revision when
additional information concerning assets and liability valuations is
obtained.
(B) Represents assets not acquired and liabilities not assumed in the Beran
Acquisition.
(C) Historical and Pro Forma financial information with respect to Irving N.
Beran, M.D., P.A. and Affiliates excludes certain incremental revenues
the Company anticipates realizing as a result of the integration of the
billing and collection functions of the Beran facilities with those of
the Company and the application of the Company's billing and collection
procedures.
(D) Represents the preliminary allocation of excess of purchase price over
the estimated fair market value of the tangible and identifiable
intangible assets acquired and liabilities assumed. The consideration for
the Beran Acquisition consisted of (i) cash in the amount of $11.5
million and (ii) the issuance of Series D Preferred Stock of the Company
with an aggregate liquidation preference of approximately $9.3 million.
The Company also loaned the sellers an aggregate of $2.5 million.
(E) Reflects the reclassification of professional fees incurred in connection
with the Beran Acquisition.
(F) Reflects the accrual of additional estimated professional fees to be
incurred in connection with the Beran Acquisition.
(G) Reflects the issuance of common stock earned upon consummation of the
Beran Acquisition in connection with a consulting agreement by and
between the Company and a financial advisor.
(H) Reflects the commitment fees incurred and the subsequent amortization of
such fees in connection with the financing of the Beran Acquisition.
(I) Reflects the issuance of warrants in connection with the financing of the
Beran Acquisition.
(J) Reflects the elimination of salary and payroll taxes associated with
certain Irving N. Beran family members offset by certain expected
increases in personnel expenses, including an acquisition bonus payable
to an employee of the Company.
(K) Reflects the elimination of a portion of professional fees that will be
eliminated subsequent to the consummation of the Beran Acquisition.
(L) Represents the estimated increase in depreciation and amortization
expense relating to the tangible and intangible assets acquired in the
Beran Acquisition based upon the preliminary purchase price allocation.
(M) Reflects the elimination of historical interest expense. No existing
indebtedness of the Beran entities are being assumed in the Beran
Acquisition.
(N) Reflects interest expense associated with the financing of the Beran
Acquisition at an annual interest rate of 12%.
(O) Reflects interest income to be earned by the Company in connection with
a loan made to the sellers in the aggregate amount of $2.5 million at
an annual interest rate of 8%.
(P) Reflects the elimination of minority interests resulting from the
Company's purchase of 100% of the ownership interests.
(Q) Reflects the pro forma provision for income taxes to give effect to the
elimination of additional income tax expense based upon the utilization
of the Company's net operating loss carryforwards.
(R) Reflects the pro forma Series D Preferred Stock dividend requirement. The
Company anticipates redeeming the Series D Preferred Stock from proceeds
from a larger financing, in which case the pro forma preferred dividends
of $1,024,929 and $414,810 for the year ended December 31, 1997 and the
six months ended June 30, 1998, respectively, would be replaced by
interest expense estimated to be $955,048 and $472,422 respectively,
resulting in an increase/(decrease) in net income available to common
shareholders of $69,881 and ($57,612), respectively.
(S) Reflects the elimination of revenues and expenses associated with an
imaging facility which ceased operation in January 1997.
(T) Reflects the elimination of a historical non-recurring loss on
abandonment.
