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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
DATE OF REPORT (Date of Earliest Event Reported): July 25, 2000
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COMPREHENSIVE MEDICAL DIAGNOSTICS GROUP, INC.
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(Exact name of registrant as specified in its charter)
Florida 000-22653 65-035816
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(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
32 Nassau St. (2nd Fl) Princeton, NJ 08542
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code 609-924-1001
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F/K/A AMERICAN RISK MANAGEMENT GROUP, INC.
Former address: 4700 Ashwood Drive, Ste 300, Cincinnati, OH 45241
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(Former name or former address, if changed since last report.)
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ITEM 7: FINANCIAL STATEMENTS AND EXHIBITS
ProForma Combined Financial Data
The Unaudited ProForma Combined Statement of Operations of the Company for the
fiscal year ended June 30, 2000 (the "ProForma Statement of Operations") and the
Unaudited ProForma Combined Balance Sheet of the Company as of June 30, 2000
(the "ProForma Balance Sheet" and together with the ProForma Statement of
Operations, the "ProForma Financial Statements") have been prepared to
illustrate the effect of the acquisition of the assets and assumption of the
liabilities of Cardiovascular Laboratories, LLC ("CLI") as of July 27, 2000, the
merger of The Comprehensive Medical Group, Ltd ("CMG") as of July 25, 2000 and
the acquisition of the assets and assumption of the liabilities of CAT LLC
("CAT") as of August 2, 2000 by Comprehensive Medical Diagnostics Group, Inc.
("CMDG"), as if such transactions took place on June 30, 2000. The ProForma
Financial Statements do not purport to be indicative of the results of
operations or financial position of the Company that would have actually been
obtained had such transactions been completed as of the assumed dates and for
the period presented, or which may be obtained had such transactions been
completed as of the assumed dates and for the period presented, or which may be
obtained in the future. The ProForma adjustments are described in the
accompanying notes and are based upon available information and certain
assumptions that the Company believes are reasonable. The ProForma Financial
Statements should be read in conjunction with the separate historical financial
statements of CLI , a significant subsidiary.
A preliminary allocation of the purchase price has been made to major categories
of assets and liabilities in the accompanying ProForma Financial Statements
based on available information. The actual allocation of purchase price and the
resulting effect on income from operations may differ significantly from the
ProForma amounts included herein. These ProForma adjustments represent the
Company's preliminary determination of purchase accounting adjustments and are
based upon available information and certain assumptions that the Company
believes to be reasonable. Consequently, the amounts reflected in the ProForma
Financial Statements are subject to change, and the final amounts may differ
substantially.
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COMPREHENSIVE MEDICAL DIAGNOSTICS GROUP, INC.
UNAUDITED PROFORMA COMBINED BALANCE SHEET
JUNE 30, 2000
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<CAPTION>
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PROFORMA
PROFORMA COMBINED
CMDG CLI CMG CAT ADJUSTMENTS COMPANY
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<S> <C> <C> <C> <C> <C> <C>
Assets
Current Assets
Cash $ 10,017 $ 13,393 $ 413 B $ 361,053 $
E 155,000 539,876
Accounts Receivable - 496,335 - $ 143,100 - 639,435
Other Current Assets 43,477 61,698 - - - 105,175
------------- ------------- ------------ --------- ------------- ------------
53,494 571,426 413 143,100 516,053 1,284,486
Property Plant & Equipment - 817,493 95,792 700,000 - 1,613,285
Deferred Income Taxes - 193,071 - - - 193,071
Other Assets - 32,179 4,523 - - 36,702
Excess Cost Over Fair Market B 1,100,000
Value of Assets Acquired C 684,000
D 1,125,000
F 937,500
K (92,698)
J (138,575) 3,615,227
------------- ------------- ------------ --------- ------------- ------------
Total Assets $ 53,494 1,614,169 100,728 843,100 4,131,280 6,742,771
============= ============= ============ ========= ============= ============
Liabilities and Stockholders
Equity
Current Liabilities
Notes Payable -Shareholders - - 656,411 - E 155,000
E (700,000) 111,411
Accounts Payable and
Accrued Expense 529,403 306,022 27,959 - H (425,000) 438,384
Current Portion of Long
Term Debt - 204,748 - - C 228,000 432,748
Current Portion of
Capitalized Lease Obligations - 65,202 - - - 65,202
Deferred Income Taxes - 49,026 - - - 49,026
Other Current Liabilities - 27,923 - - - 27,923
------------- ------------- ------------ --------- ------------- ------------
529,403 652,921 684,370 - (742,000) 1,124,694
Notes Payable 930,000 432,529 - - - 1,362,529
Long Term Debt - 294,476 - - C 456,000 750,476
Capitalized Lease Obligations - 355,098 - - - 355,098
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1,459,403 1,735,024 684,370 - (286,000) 3,592,797
Stockholders' Equity
Preferred Stock - - - - D 1,125,000
F 937,500 2,062,500
Common Stock 263 100 - - J (36) 327
Additional Paid In Capital 6,855,063 2,500 - 843,100 B (300,000)
B 1,761,053
E 700,000
H 425,000
J (845,636) 9,441,080
Accumulated Deficit (8,196,294) (123,455) (583,642) - J 707,097
K (92,698) (8,288,992)
Treasury Stock (64,941) - - - - (64,941)
------------- ------------- ------------ --------- ------------- ------------
Total Stockholders' Equity (1,405,909) (120,855) (583,642) 843,100 4,417,280 3,149,974
------------- ------------- ------------ --------- ------------- ------------
Total Liabilities and
Stockholders' Equity $ 53,494 $ 1,614,169 $ 100,728 $ 843,100 $ 4,131,280 $ 6,742,771
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</TABLE>
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COMPREHENSIVE MEDICAL DIAGNOSTICS GROUP, INC.
UNAUDITED PROFORMA COMBINED STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
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PROFORMA
PROFORMA COMBINED
CMDG CLI CMG CAT ADJUSTMENTS COMPANY
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<S> <C> <C> <C> <C> <C> <C>
Revenue $ - $ 2,352,295 $ - $ 1,025,575 $ - $ 3,377,870
Selling General and
Administrative Expense 580,814 2,578,808 583,642 432,900 K 109,887 4,286,051
----------- ---------- ----------- ------------ ------------- ------------
Operating Income (Loss) (580,814) (226,513) (583,642) 592,675 (109,887) (908,181)
Interest Expense (1,399,075) (100,311) - - I 1,324,675 (174,711)
----------- ---------- ----------- ------------ ------------- -----------
Loss From Continuing
Operations Before Minority
Interest (1,979,889) (326,824) (583,642) 592,675 1,214,788 (1,082,892)
Loss From Continuing
Operations Applicable to
Minority Interest 395,978 - - - G (395,978) -
----------- ---------- ----------- ------------ ------------- -----------
Loss From Continuing
Operations before income taxes (1,583,911) (326,824) (583,642) 592,675 818,810 (1,082,892)
Income Tax Benefit (Expense) - - - - - -
Discontinued Operations
Loss From Operations (546,545) - - - G 546,545 -
Loss on Disposal (7,152,839) - - - G 7,152,839 -
Loss From Discontinued
Operations Before Minority
Interest (7,699,384) - - - 7,699,384 -
Loss From Discontinued
Operations Applicable to
Minority Interest 1,087,001 - - - G (1,087,001) -
Loss From Discontinued
Operations (6,612,383) - - - 6,612,383 -
----------- ---------- ----------- ------------ ------------- ------------
Net Loss $ (8,196,294) $ (326,824) $ (583,642) $ 592,675 $ 7,431,193 $ (1,082,892)
============ ========== ============ ============ ============= ============
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NOTES TO THE UNAUDITED
PROFORMA COMBINED FINANCIAL STATEMENTS
A. The proforma financial statements are based upon the financial activity of
CMDG (the Company) and CMG at and for the twelve months ended June 30,
2000 and of CLI at and for the twelve month period ended December 31,
1999. Financial activity of CAT is that as forecasted at and for the
twelve month period commencing August 2, 2000, the date its assets were
acquired by CMDG.
B. As of September 29, 2000 the Company sold 2,121,750 common shares in a
private placement exempt from registration under Regulation D, promulgated
under the Securities Act of 1933, as amended, thereby generating cash
proceeds of $1,761,053.
These funds were utilized as follows:
a. $1,100,000 cash consideration to acquire the assets of CAT.
b. Professional fees and expenses in connection with the offering and
the Company's acquisition of the assets of CLI and CAT and the
merger into it of CMG in the estimated amount of $300,000.
c. General working capital purposes.
C. As of July 27, 2000 the Company through its subsidiary, CLH, incidental to
its acquisition of the assets and assumption of the liabilities of
Cardiovascular Laboratories, Inc., assumed a certain obligation under a
seller note to pay up to $684,000 over a period of three years.
D. As of July 25, 2000 the Company, pursuant to an Agreement and Plan of
Reorganization, issued 3,000,000 shares of its Series A Convertible
Preferred Stock, in exchange for 100 shares of CMG's Series A Common
Stock, which was all of the issued and outstanding stock of CMG.
This issuance by the Company is recorded herein at $.375 per share,
management's estimate of the fair market value per share.
E. As part of the CMG transaction discussed at D above, the Company issued
843,373 shares of its common stock to entities which had committed to
making working capital loans to CMG aggregating approximately $700,000.
As of June 30, 2000 the date of the unaudited proforma combined balance
sheet, such advances amounted to approximately $545,000. The proforma
reflects additional advances of $155,000.
F. As of August 2, 2000 the Company issued, in addition to the cash
consideration of $1,100,000 discussed at B above, 2,500,000 shares of its
Series A Convertible Preferred Stock, which issuance is recorded herein at
$.375 per share, management's estimated value of the fair market value per
share.
G. During its fiscal year ended June 30, 2000 the Company changed its focus
and strategy to concentrate on becoming a provider of medical treatment,
diagnostic testing and ancillary services to the long term health care
business sector and the medical community at large. In that connection the
Company:
a. On June 29, 2000 discontinued the operations of its administrative
services organization, People First, LLC.
b. On March 31, 2000 disposed of its manufacturing division, Industrial
Fabrication and Repair, Inc. (IFR) upon the exercise by Lester Gann,
President of IFR, of his contractual right to reacquire this company
in exchange for all of his common shares of CMDG and
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Notes to the Unaudited
ProForma Combined Financial Statements
c. On June 30, 2000 decided to close down and liquidate Federal Supply,
Inc. and Federal Fabricators, Inc., fabricators and distributors of
custom design fire sprinkler systems and components.
The unaudited ProForma Combined Statement of Operations has been adjusted
to eliminate the impact of discontinued operations and minority interests
therein.
H. On July 16, 2000 in contemplation of and as a condition precedent to its
July 17, 2000 Stock Purchase Agreement, the Company entered into an
Agreement with Connie Steinmetz ("Steinmetz"), Strategic Capital Holdings
("Strategic"), Yucatan Holding Company ("Yucatan"), Arizona Development
Corporation ("Arizona"), and Atlas Perlman, P.A. ("Escrow Agent")
terminating certain agreements with and obligations of the Company
consisting of:
a. $250,000 owed by the Company to Yucatan
b. $175,000 owed by the Company to Arizona
c. The Company's obligation under a certain consulting agreement with
Steinmetz and,
d. The Company's obligations under a certain consulting agreement with
Strategic.
Steinmetz, Strategic, Yucatan and Arizona were issued 300,000 shares of
common stock from the Company in addition to 200,000 common shares owned
by certain shareholders of the Company having been placed in escrow.
The issuance has been recorded as a $425,000 reduction of indebtedness and
corresponding credit to additional paid in capital.
I. On July 3, 2000 the Company entered into a certain Termination and
Settlement Agreement with the holders of its 8% convertible promissory
notes. In order to effectuate the agreement, the terms and conditions of
the convertible notes were amended and restated in a Note Reformation
Agreement dated as of July 14, 2000 and a new convertible note was issued
reflecting a aggregate principal balance of $930,000 and amending and
modifying the conversion terms of the convertible notes. The unaudited
proforma combined statement of operations has been adjusted to properly
reflect the resultant ongoing interest expense.
J. Upon the acquisition of the net assets of CLI and CAT, and merger of CMG,
Shareholder's Equity accounts have been eliminated against Excess Cost
Over Fair Market Value of Assets Acquired.
K. Amortization expense of $92,698; reflected to recognize Excess Over Fair
Market Value of Net Assets Acquired amounting to $3,707,925 over a 40 year
period.
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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.
COMPREHENSIVE MEDICAL DIAGNOSTICS GROUP, INC.
By: /s/ Ronald Wilheim
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Ronald Wilheim
Chief Executive Officer
Date: December 29, 2000
