<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-KA-1
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): May 2, 1997 (April 17, 1997)
----------------------------
DIAGNOSTIC HEALTH SERVICES, INC.
Delaware 0-21758 22-2960048
- ----------------- ---------------- -------------
(State or other (Commission File (IRS Employer
jurisdiction of Number) ID Number)
incorporation)
2777 Stemmons Freeway, Suite 1525, Dallas, Texas 75207
------------------------------------------------------
(Address of principal executive offices)
(214) 634-0403
------------------------------------------------------
(Registrant's telephone number, including area code)
------------------------------------------------------
(Former name or former address, if changed since last report.)
This first amendment to the Company's report on Form 8-K, originally
dated May 2, 1997, is being filed for the purposes of providing and including
(a) the required special-purpose statements of Diagnostic Imaging Services, Inc.
related to the assets acquired and liabilities assumed, (b) the combined pro
forma financial information, and (c) the consent of Simonton, Kutac & Barnidge,
L.L.P., independent public accountants.
Consistent with the foregoing, only Item 7 of the report on Form 8-K
is being amended, and the financial statements, pro forma financial information
and accountants' consent are attached hereto.
<PAGE>
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS
- --------------------------------------------------------------------------
(a) Special-purpose financial statements of Diagnostic Health Services, Inc.
1. Statements of assets acquired and liabilities assumed from Diagnostic
Imaging Services, Inc. as of December 31, 1996 and 1995.
2. Statements of operations of assets acquired and liabilities assumed from
Diagnostic Imaging Services, Inc. for the years ended December 31, 1996
and 1995.
3. Statements of cash flows of assets acquired and liabilities assumed from
Diagnostic Imaging Services, Inc. for the years ended December 31, 1996
and 1995.
(b) Pro forma financial information.
(c) The following Exhibits are filed as part of this Form 8-KA-1:
23. Consent of Simonton, Kutac & Barnidge, L.L.P.
<PAGE>
ITEM 7(a)
---------
SPECIAL PURPOSE FINANCIAL STATEMENTS OF
DIAGNOSTIC HEALTH SERVICES, INC.
<PAGE>
INDEPENDENT AUDITOR'S REPORT
----------------------------
To the Board of Directors
of Diagnostic Health Services, Inc.
We have audited the accompanying special-purpose statements of assets acquired
and liabilities assumed by Diagnostic Health Services, Inc. (the "Company") from
Diagnostic Imaging Services, Inc. ("DIS") as of December 31, 1996 and 1995, and
the related special-purpose statements of operations and cash flows for the
years then ended. These financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
The accompanying special-purpose financial statements were prepared for the
purpose of presenting the assets acquired and liabilities assumed pursuant to an
stock purchase agreement dated March 1, 1997 (consummated April 17, 1997),
between the Company and DIS as discussed in Note 1, and are not intended to be a
presentation of financial position, results of operations, and cash flows of the
Company in accordance with generally accepted accounting principles.
In our opinion, the special-purpose financial statements referred to above
present fairly, in all material respects, the assets acquired and liabilities
assumed from DIS as of December 31, 1996 and 1995, and the statements of
operations and cash flows for the years then ended on the basis of accounting
described in Note 2.
Simonton, Kutac & Barnidge, L.L.P.
Houston, Texas
June 19, 1997
<PAGE>
DIAGNOSTIC HEALTH SERVICES, INC. AND SUBSIDIARIES
-------------------------------------------------
STATEMENTS OF ASSETS ACQUIRED AND LIABILITIES ASSUMED
-----------------------------------------------------
FROM DIAGNOSTIC IMAGING SERVICES, INC.
--------------------------------------
<TABLE>
<CAPTION>
ASSETS
------
December 31, December 31,
1996 1995
----------- -----------
<S> <C> <C>
Property & Equipment:
Office furniture and equipment $ 111,668 $ 99,414
Machinery and service equipment 6,898,537 6,877,174
Leasehold improvements 2,151,516 1,749,382
Less: Accumulated depreciation and amortization (2,236,507) (1,092,963)
----------- -----------
Total Property & Equipment 6,925,214 7,633,007
----------- -----------
Other Assets:
Goodwill 12,957,415 12,481,701
----------- -----------
Total Other Assets 12,957,415 12,481,701
----------- -----------
Total Assets $19,882,629 $20,114,708
=========== ===========
LIABILITIES & STOCKHOLDERS' EQUITY
----------------------------------
Current Liabilities:
Current capital lease obligations $ 1,160,299 $ 232,080
----------- -----------
Total Current Liabilities 1,160,299 232,080
----------- -----------
Long-term capital lease obligations 5,222,330 6,382,628
----------- -----------
Total Liabilities 6,382,629 6,614,708
----------- -----------
Stockholders' Equity:
Common stock, no par value,
10,000,000 shares authorized;
1,000 shares issued and outstanding 13,500,000 13,500,000
----------- -----------
Total Stockholders' Equity 13,500,000 13,500,000
----------- -----------
Total Liabilities & Stockholders' Equity $19,882,629 $20,114,708
=========== ===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
DIAGNOSTIC HEALTH SERVICES, INC. AND SUBSIDIARIES
-------------------------------------------------
STATEMENTS OF OPERATIONS OF ASSETS ACQUIRED AND LIABILITIES ASSUMED
-------------------------------------------------------------------
FROM DIAGNOSTIC IMAGING SERVICES, INC.
--------------------------------------
<TABLE>
<CAPTION>
For the For the
Year Ended Year Ended
December 31, December 31,
1996 1995
------------ ------------
<S> <C> <C>
Gross revenues $6,165,749 $6,197,964
---------- ----------
Expenses:
General & administrative 73,153 53,123
Salaries & employee benefits 965,921 972,273
Legal & professional 110,266 20,880
Rent & utilities 447,908 402,132
Taxes & insurance 233,049 218,902
Technical operating expenses 1,381,453 1,651,742
Depreciation and amortization 1,143,523 1,102,593
---------- ----------
Total operating expenses 4,355,273 4,421,645
---------- ----------
Income from operations 1,810,476 1,776,319
---------- ----------
Other expense:
Other expense 32,805 209,449
Interest expense 661,023 674,938
---------- ----------
Total other expense 693,828 884,387
---------- ----------
Income before taxes 1,116,648 891,932
Income tax expense 379,660 303,257
---------- ----------
Net income $ 736,988 $ 588,675
========== ==========
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
DIAGNOSTIC HEALTH SERVICES, INC. AND SUBSIDIARIES
-------------------------------------------------
STATEMENTS OF CASH FLOWS OF ASSETS ACQUIRED AND LIABILITIES ASSUMED
-------------------------------------------------------------------
FROM DIAGNOSTIC IMAGING SERVICES, INC.
--------------------------------------
<TABLE>
<CAPTION>
For the For the
Year Ended Year Ended
December 31, December 31,
1996 1995
------------- -------------
<S> <C> <C>
Cash Flows from Operations:
Net income $ 736,988 $ 588,675
Adjustments to Reconcile Net Income to
Net Cash Provided by Operations:
Depreciation and amortization 1,143,523 1,102,593
Increase (decrease) in accounts payable (1,212,681) 758,152
----------- -----------
Net Cash Provided by Operations 667,830 2,449,420
----------- -----------
Cash Flows from Investing Activities:
Cash payments for the purchase of property (435,751) (1,298,962)
----------- -----------
Net Cash Used in Investing Activities (435,751) (1,298,962)
----------- -----------
Cash Flows from Financing Activities:
Payments on capital lease obligations (232,079) (1,150,458)
----------- -----------
Net Cash Used in Financing Activities (232,079) (1,150,458)
----------- -----------
Net increase (decrease) in cash -- --
Cash, beginning of year -- --
----------- -----------
Cash, end of year $ -- $ --
=========== ===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
DIAGNOSTIC HEALTH SERVICES, INC. AND SUBSIDIARIES
-------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
-----------------------------
NOTE 1 - BUSINESS AND ASSET ACQUISITION FROM DIAGNOSTIC IMAGING SERVICES, INC.
- --------------------------------------------------------------------------------
("DIS")
- ------
On April 17, 1997 (effective as of March 1, 1997), Diagnostic Health Services,
Inc. (the "Company") through its wholly-owned subsidiary, SoCal Diagnostic
Services, Inc., acquired all of the issued and outstanding stock of Diagnostic
Imaging Services, Inc. ("DIS" and together with its wholly-owned subsidiaries,
Diagnostic Imaging Services, Inc. I and Santa Monica Imaging Center Limited
Partnership, collectively referred to herein as the "DIS Companies"), whose
business consists primarily of the ownership and operation of four (4) hospital-
based magnetic resonance imaging (MRI) centers. The purchase price for the
stock of DIS was $9,083,865 (subject to post-closing adjustment), of which
$7,583,865 was paid in cash, and the remaining $1,500,000 of which is payable
either in cash or (at the seller's option) in common stock of the Company
(valued at $7.615 per share) in three equal annual installments of $500,000 each
on April 17 of each of 1998, 1999 and 2000. In addition, the DIS Companies were
acquired subject to capital lease obligations, financing agreements and other
commitments in respect of fixed assets of the business in the aggregate
principal amount of $6,046,755.
The business of the DIS Companies consists primarily of providing magnetic
resonance imaging services on a fixed site basis to hospitals and acute care
facilities located in Southern California.
NOTE 2 - BASIS OF PRESENTATION
- ------------------------------
The special-purpose financial statements included herein do not include all
information and footnote disclosures normally included in financial statements
prepared in accordance with generally accepted accounting principles.
In the opinion of management, the special-purpose financial statements include
all necessary adjustments for the fair presentation of the statements of assets
acquired and liabilities assumed and the related statements of operations and
cash flows for the periods noted therein.
NOTE 3 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
- ---------------------------------------------------
Equipment --- Equipment is carried at cost. Depreciation is calculated on a
straight-line basis over the estimated useful life of the asset or over the
lease term, if shorter. Useful lives are generally five to ten years for
equipment and furniture and seven to fifteen years for leasehold improvements.
<PAGE>
DIAGNOSTIC HEALTH SERVICES, INC. AND SUBSIDIARIES
-------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
-----------------------------
NOTE 4 - LEASES
- ---------------
The Company, as lessee, has entered into and/or assumed various non-cancelable
leases for machinery, service equipment, vehicles, and office facilities. The
following assets, subject to capital leases, are included in the balance sheet
under the corresponding asset categories at December 31, 1996:
Future minimum lease payments under non-cancelable leases at December 31, 1996
are as follows:
<TABLE>
<CAPTION>
For the Years Ending Capital Operating
December 31, Leases Leases
---------------------- ------------ ------------
<S> <C> <C>
1997 $ 1,793,667 $ 321,796
1998 1,793,666 177,248
1999 1,793,666 157,248
2000 1,662,614 90,000
2001 1,003,215 7,500
Thereafter 74,500 --
----------- -----------
Total minimum lease payments 8,121,328 $ 753,792
===========
Less: amount representing interest (1,738,699)
-----------
Present value of minimum lease payments 6,382,629
-----------
Less: current portion (1,160,299)
-----------
Long-term capital lease obligation $ 5,222,330
===========
</TABLE>
Rent expense during the years ended December 31, 1996 and 1995 for all operating
leases was $340,490 and $285,958, respectively, and is included in operating
expenses.
<PAGE>
Item 7(b) PRO FORMA FINANCIAL INFORMATION
-------------------------------
DIAGNOSTIC HEALTH SERVICES, INC. AND SUBSIDIARIES
-------------------------------------------------
PRO-FORMA BALANCE SHEET (UNAUDITED)
-----------------------------------
DECEMBER 31, 1996
-----------------
ASSETS
------
<TABLE>
<CAPTION>
Diagnostic DIS DIS
Health Ultrasound MRI Pro-Forma Pro-Forma
Services Division Division Adjustments Combined
------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
Current Assets:
Cash and cash equivalents $ 229,547 $ -- $ -- $ 3,096,660 $ 3,326,207
Short-term investments 5,000,000 -- -- -- 5,000,000
Accounts receivable, net 11,458,590 112,350 -- -- 11,570,940
Contracts receivable-current 1,317,146 -- -- -- 1,317,146
Prepaid expenses 1,359,596 -- -- -- 1,359,596
Deferred tax asset 57,876 -- -- -- 57,876
----------- ----------- ----------- ----------- -----------
Total Current Assets 19,422,755 112,350 -- 3,096,660 22,631,765
----------- ----------- ----------- ----------- -----------
Fixed Assets:
Property and equipment 21,274,620 3,204,569 9,161,721 (3,448,752) 30,192,158
Less: accumulated depreciation (5,425,437) (1,212,245) (2,236,507) 3,448,752 (5,425,437)
----------- ----------- ----------- ----------- -----------
Total Fixed Assets 15,849,183 1,992,324 6,925,214 -- 24,766,721
----------- ----------- ----------- ----------- -----------
Other Assets:
Deposits and other 958,391 -- -- -- 958,391
Debt issuance costs -- -- -- 800,000 800,000
Deferred acquisition costs 164,199 -- -- -- 164,199
Contracts receivable 1,739,587 -- -- -- 1,739,587
Goodwill 15,022,858 -- 12,957,415 1,605,426 29,585,699
Non-compete agreements 1,586,818 -- -- 2,000,000 3,586,818
Less: accumulated amortization (1,423,418) -- -- -- (1,423,418)
----------- ----------- ----------- ----------- -----------
Total Other Assets 18,048,435 -- 12,957,415 4,405,426 35,411,276
----------- ----------- ----------- ----------- -----------
Total Assets $53,320,373 $ 2,104,674 $19,882,629 $ 7,502,086 $82,809,762
=========== =========== =========== =========== ===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
DIAGNOSTIC HEALTH SERVICES, INC. AND SUBSIDIARIES
-------------------------------------------------
PRO-FORMA BALANCE SHEET (UNAUDITED), CONTINUED
----------------------------------------------
DECEMBER 31, 1996
LIABILITIES AND STOCKHOLDERS' EQUITY
<TABLE>
<CAPTION>
Diagnostic DIS DIS
Health Ultrasound MRI Pro-Forma Pro-Forma
Services Division Division Adjustments Combined
------------ ---------- ----------- ------------- ------------
<S> <C> <C> <C> <C> <C>
Current Liabilities:
Accounts payable $ 1,957,758 $ -- $ -- $ -- $ 1,957,758
Accrued expenses 1,534,551 -- -- -- 1,534,551
Current portion of
long-term debt 1,991,824 -- -- -- 1,991,824
Current lease obligations 2,154,035 396,804 1,160,299 -- 3,711,138
Deferred liability -- -- -- 500,000 500,000
Notes payable 1,572,000 -- -- -- 1,572,000
Other current liabilities 195,000 -- -- -- 195,000
----------- ---------- ----------- ------------ -----------
Total Current
Liabilities 9,405,168 396,804 1,160,299 500,000 11,462,271
Long-term debt 7,081,745 -- -- -- 7,081,745
Long-term lease obligations 4,865,190 1,209,956 5,222,330 -- 11,297,476
New subordinated notes
payable -- -- -- 20,000,000 20,000,000
Deferred liability -- -- -- 1,000,000 1,000,000
Other liabilities 933,872 -- -- -- 933,872
Deferred tax liability 1,057,779 -- -- -- 1,057,779
----------- ---------- ----------- ------------ -----------
Total Liabilities 23,343,754 1,606,760 6,382,629 21,500,000 52,833,143
----------- ---------- ----------- ------------ -----------
Stockholders' equity:
Preferred stock, $0.01
par value, authorized
3,000,000 shares; issued
and outstanding 648,986
shares; $4.5 million
liquidation preference 649 -- -- -- 649
Common stock, $.001 par
value, authorized
15,000,000 shares;
issued 8,400,762 shares;
outstanding 8,167,503
shares 8,401 -- 13,500,000 (13,500,000) 8,401
Additional paid-in-capital 27,617,425 -- -- -- 27,617,425
Retained earnings 2,567,195 -- -- -- 2,567,195
Due to parent -- 497,914 -- (497,914) --
Foreign currency
translation
adjustment (5,900) -- -- -- (5,900)
Stockholder receivable (103,500) -- -- -- (103,500)
Treasury stock (at cost) (107,651) -- -- -- (107,651)
----------- ---------- ----------- ------------ -----------
Total Stockholders'
Equity 29,976,619 497,914 13,500,000 (13,997,914) 29,976,619
----------- ---------- ----------- ------------ -----------
Total Liabilities and
Stockholders'
Equity $53,320,373 $2,104,674 $19,882,629 $ 7,502,086 $82,809,762
=========== ========== =========== ============ ===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
DIAGNOSTIC HEALTH SERVICES, INC. AND SUBSIDIARIES
-------------------------------------------------
PRO-FORMA STATEMENT OF OPERATIONS (UNAUDITED)
---------------------------------------------
FOR THE YEAR ENDED DECEMBER 31, 1996
------------------------------------
<TABLE>
<CAPTION>
Diagnostic DIS DIS
Health Ultrasound MRI Pro-Forma Pro-Forma
Services Division Division Adjustments Combined
------------ ----------- ----------- ----------- ------------
<S> <C> <C> <C> <C> <C>
Gross Revenues $24,171,286 $3,767,465 $6,165,749 $ -- $34,104,500
----------- ---------- ---------- ----------- -----------
Expenses:
General & administrative 1,385,305 30,624 73,153 -- 1,489,082
Salaries & employee benefits 11,898,905 1,864,567 965,921 -- 14,729,393
Legal & professional 177,756 67,264 110,266 -- 355,286
Rent & utilities 389,533 95,973 447,908 -- 933,414
Taxes & insurance 420,375 154,098 233,049 -- 807,522
Technical operating expenses 3,158,037 382,877 1,381,453 -- 4,922,367
Provision (credit) for doubtful
accounts 40,970 -- -- -- 40,970
Depreciation and amortization 2,796,865 294,015 1,143,523 -- 4,234,403
----------- ---------- ---------- ----------- -----------
Total operating expenses 20,267,746 2,889,418 4,355,273 -- 27,512,437
----------- ---------- ---------- ----------- -----------
Income from operations 3,903,540 878,047 1,810,476 -- 6,592,063
----------- ---------- ---------- ----------- -----------
Other income (expense):
Other income 486,704 (133,792) (32,805) -- 320,107
Interest expense (869,601) (98,431) (661,023) -- (1,629,055)
----------- ---------- ---------- ----------- -----------
Total other income (expense) (382,897) (232,223) (693,828) -- (1,308,948)
----------- ---------- ---------- ----------- -----------
Income before income tax expense 3,520,643 645,824 1,116,648 -- 5,283,115
Income tax expense 1,061,560 219,580 379,660 -- 1,660,800
----------- ---------- ---------- ----------- -----------
Net income $ 2,459,083 $ 426,244 $ 736,988 $ -- $ 3,622,315
=========== ========== ========== =========== ===========
Earnings per share:
Primary $ 0.32 $ 0.06 $ 0.09 $ 0.00 $ 0.47
=========== ========== ========== =========== ===========
Fully diluted $ 0.31 $ 0.06 $ 0.08 $ 0.00 $ 0.45
=========== ========== ========== =========== ===========
Weighted average common shares -
primary 7,738,414 7,738,414 7,738,414 7,738,414 7,738,414
=========== ========== ========== =========== ===========
Weighted average common shares -
fully diluted 8,133,401 8,133,401 8,133,401 8,133,401 8,133,401
=========== ========== ========== =========== ===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
DIAGNOSTIC HEALTH SERVICES, INC. AND SUBSIDIARIES
-------------------------------------------------
NOTES TO PRO FORMA FINANCIAL STATEMENTS
---------------------------------------
NOTE 1 - BASIS OF PRESENTATION
- ----------------------------------
Effective March 1, 1997, Diagnostic Health Services, Inc. (the "Company"),
through its SoCal Diagnostic Services, Inc. subsidiary ("SoCal") purchased
substantially all of the operating assets of the ultrasound division
("Ultrasound Division") of Diagnostic Imaging Services, Inc. ("DIS"). The
acquired business includes a mobile/fixed ultrasound business serving clients in
San Diego, Orange and Los Angeles Counties of California. The purchase price
paid was $6,519,475 (subject to post-closing adjustment), which was paid
entirely in cash. In addition, SoCal assumed capital lease obligations,
financing agreements and other commitments related to the fixed assets purchased
in the aggregate principal amount of $1,519,261.
On April 17, 1997 (effective as of March 1, 1997), the Company, through its
SoCal subsidiary, acquired all of the issued and outstanding stock of DIS (which
together with its wholly-owned subsidiaries, Diagnostic Imaging Services, Inc. I
and Santa Monica Imaging Center Limited Partnership, are collectively referred
to herein as the "MRI Division") whose business consists primarily of the
ownership and operation of four (4) hospital-based magnetic resonance imaging
(MRI) centers. The purchase price for the stock of DIS was $9,083,865 (subject
to post-closing adjustment), of which $7,583,865 was paid in cash, and the
remaining $1,500,000 of which is payable either in cash or (at the seller's
option) in common stock of the Company (valued at $7.615 per share) in three
equal annual installments of $500,000 each on April 17 of each of 1998, 1999 and
2000. In addition, the MRI Division was acquired subject to capital lease
obligations, financing agreements and other commitments in respect of fixed
assets of the business in the aggregate principal amount of $6,046,755.
The pro-forma financial statements included herein do not include all
information and footnote disclosures normally included in financial statements
prepared in accordance with generally accepted accounting principles.
In the opinion of management, the pro-forma financial statements include all
necessary adjustments for the fair presentation of the statements of assets
acquired and liabilities assumed and the related statements of operations for
the period noted therein.
The statements of operations for the period presented reflect no adjustments.
Management believes that the allocation methods are reasonable and that
allocated costs and expenses approximate what such amounts would be if DIS was
operated on a stand-alone basis.
<PAGE>
DIAGNOSTIC HEALTH SERVICES, INC. AND SUBSIDIARIES
-------------------------------------------------
NOTES TO PRO FORMA FINANCIAL STATEMENTS
---------------------------------------
NOTE 2 - SENIOR SUBORDINATED NOTES PAYABLE
- ------------------------------------------
The balance sheet shows pro-forma adjustments to reflect the funds utilized to
pay the cash portion of the purchase price in the MRI Division transaction
obtained through the simultaneous issuance and sale by the Company to The
Prudential Insurance Company of America ("Prudential") of $20,000,000 in
principal amount of senior subordinated promissory notes of the Company (the
"Notes"). The Notes bear interest at a fixed rate of 10.5% per annum (payable
quarterly,) and mature as to principal in equal one-third installments on April
17 of each of 2003, 2004 and 2005. The notes may be prepaid at the Company's
option (subject to certain "make-whole" prepayment premiums in respect of the
remaining stated term of the Notes), and the Company may be required (at the
Noteholders' option) to purchase the Notes in the event of a change in control
of the Company. In addition to application to the payment of the cash portion
of the purchase price for the stock of DIS, the net proceeds from the issuance
and sale of the Notes were utilized to repay $5,500,000 in borrowings obtained
under the Company's senior credit facilities with Texas Commerce Bank National
Association (the "Bank") (utilized in connection with the Company's March 1997
acquisition of the Ultrasound Division of DIS), and for short-term investments
pending other use of such net proceeds.
In connection with the issuance of the Notes, the Company paid Prudential a fee
in the amount of $54,590, and issued to Prudential a five-year redeemable common
stock purchase warrant (with piggyback registration rights) for 60,000 shares of
common stock of the Company at an exercise price of $12.25 per share. In
addition, the Company paid to Prudential Securities, Inc. (as placement agent) a
fee in the amount of $690,470.
<PAGE>
DIAGNOSTIC HEALTH SERVICES, INC. AND SUBSIDIARIES
-------------------------------------------------
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 hereto duly authorized.
DIAGNOSTIC HEALTH SERVICES, INC.
(Registrant)
Dated: June 30, 1997 By: /s/ BRAD A. HUMMEL
------------------------------------
Brad A. Hummel, President and
Chief Operating Officer
<PAGE>
EXHIBIT 23
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
---------------------------------------------------
We consent to the use in this Form 8-KA-1 of our report dated June 19, 1997
relating to the Statement of Assets Acquired and Liabilities Assumed from
Diagnostic Imaging Services, Inc. as of December 31, 1995 and 1996 and the
Statements of Operations and Cash Flows for the years ended December 31, 1995
and 1996.
/s/ SIMONTON, KUTAC & BARNIDGE, L.L.P.
Simonton, Kutac & Barnidge, L.L.P.
Houston, Texas
June 30, 1997
