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| CGHC > SEC Filings for CGHC > Form 8-K/A on 19-Nov-2012 | All Recent SEC Filings |
19-Nov-2012
Completion of Acquisition or Disposition of Assets, Change in Dire
(i) On September 3, 2012, we effectuated the closing of the Asset Purchase Agreement (the "Agreement") with One Health Urgent Care, Inc., an Arizona corporation, and our wholly owned subsidiary, ("One Health");and MCS Ventures I, PC., MCS Ventures II, PC., MCS Ventures III, PC., MCS Ventures IV, PC., MCS Ventures V, PC., MCS Ventures VI, PC. and MCS Ventures VII, PC. (the "Sellers").
(ii) Pursuant to the Agreement, One Health has agreed to purchase all assets (the business) and certain liabilities of the Sellers.
(iii) Pursuant to the Agreement Dr. Michael Blumhoff, MD, Chief Executive Officer of Sellers, has agreed to sit on our Board of Directors and to act as Medical Director and Chief Executive Office of OneHealth Urgent Care.
(iv) The purchase price is 5,000,000 restricted shares of our common stock. We are obligated to issue additional shares of our common stock to the Sellers if certain conditions are not met over the first two years following the Closing. (See Note 12 to the Alliance financial statements).
(a) Our Business
This document contains "forward-looking statements". All statements other than statements of historical fact are "forward-looking statements" for purposes of federal and state securities laws, including, but not limited to, any projections of earnings, revenue or other financial items; any statements of the plans, strategies and objectives of management for future operations; any statements concerning proposed new services or developments; any statements regarding future economic conditions or performance; any statements or belief; and any statements of assumptions underlying any of the foregoing.
Forward-looking statements may include the words "may," "could," "estimate," "intend," "continue," "believe," "expect" or "anticipate" or other similar words. These forward-looking statements present our estimates and assumptions only as of the date of this report. Accordingly, readers are cautioned not to place undue reliance on forward-looking statements, which speak only as of the dates on which they are made. We do not intend, and undertake no obligation, to update any forward-looking statement. You should, however, consult further disclosures we make in future filings of our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K.
Although we believe the expectations reflected in any of our forward-looking statements are reasonable, actual results could differ materially from those projected or assumed in any of our forward-looking statements. Our future financial condition and results of operations, as well as any forward-looking statements, are subject to change and inherent risks and uncertainties. The factors impacting these risks and uncertainties include, but are not limited to:
· our current lack of working capital;
· inability to raise additional financing;
· the fact that our accounting policies and methods are fundamental to how we report our financial condition and results of operations, and they may require our management to make estimates about matters that are inherently uncertain;
· deterioration in general or regional economic conditions;
· adverse state or federal legislation or regulation that increases the costs of compliance, or adverse findings by a regulator with respect to existing operations;
· inability to efficiently manage our operations;
· inability to achieve future sales levels or other operating results; and
· the unavailability of funds for capital expenditures.
For a detailed description of these and other factors that could cause actual results to differ materially from those expressed in any forward-looking statement, please see "Item 1A. Risk Factors" in this document.
Throughout this Report references to "we", "our", "us", "Capital Group Holdings", "Capital Group", "CGH",OneHealthPassTM, OHP, OneHealth, OneHealth Urgent Care, OHUC, "the Company", and similar terms refer to, Capital Group Holdings, Inc.
Company History
We were incorporated under the laws of the state of Minnesota in 1980 as Implant Technologies, Inc. On September 19, 2007, the Company filed a certificate of amendment to the Company's Articles of Incorporation changing its name to Oasis Online Technologies, Corp. On October 29, 2010, we changed our name to Capital Group Holdings, Inc.
Capital Group Holdings, Inc. (OTCQB: CGHC, "Capital Group") is an acquirer and operator of innovative health and wellness organizations that have strong market presence, brand awareness, and talented management teams working towards achieving exceptional performance over time. The Company, through its subsidiaries, currently operates 7 urgent care clinics ("OneHealth Urgent Care," "OneHealth UC") in metropolitan Phoenix, Arizona and will soon launch its telemedicine services through its subsidiary OneHealthPass™ ("OHP"). OneHealthPass™ is a direct-to-consumer medical membership program that provides members with 24/7/365 access to board-certified physicians via telephone or internet. Capital Group is positioning these companies to provide immediate access to medical services to the public in an effort to avoid any delay in access to physicians and to provide a significantly lower cost for high quality, patient-centric healthcare.
Our customers can reach a physician any time, day or night, can access basic medical services, and have the ability to receive sound medical advice and treatment for the most common minor medical issues. Our network of independent board-certified doctors may, at their discretion, provide prescriptions for treatment that can be retrieved immediately at the member's local pharmacy. Should a member need to be examined in person, they can be examined at one of our local urgent care clinics, or be referred elsewhere such as the ER, a primary care doctor, or even a specialist. Capital Group's strategy of partnering OHP with OneHealth Urgent Care is unique. The linkage will allow us to direct our new OHP members to our urgent care clinics instead of competitor clinics when they get sick, thus significantly extending our membership services, promoting customer loyalty, and significantly reducing the inherent medical liability associated with traditional telemedicine services.
OneHealthPass™
OneHealthPass™ ("OHP") is a membership program that provides access to board-certified physicians via the telephone and internet. Membership is billed monthly and members may utilize the service at any time. Should our members require additional consultations, there is a small surcharge that is added to their billing to accommodate additional consultations. OneHealthPassTM offers the following features:
· Immediate access to consultations 24/7/365
· Treatment for non-emergency ailments (cold & flu, allergies, sinus problems, bronchitis, etc.)
· Telephonic or live video consultations over a broadband connection
· Highly secure HIPAA compliant electronic health record (EHR) storage and retrieval
· 24-hour customer service agents
Capital Group plans to aggressively market OneHealthPass™ direct to consumers via local television and internet marketing campaigns. The Company plans to leverage the exposure of television advertising with a complex, information-driven Search Engine Optimization ("SEO") campaign to educate prospective members on the benefits of OneHealthPass™. Our Direct Response Television ("DRTV") program is anticipated to create millions of impressions and a significant number of new OneHealthPassTM memberships. We believe that having access to physicians via the telephone and web, as well as access to nearby urgent care centers can provide them with most of their basic healthcare needs. OneHealthPassTM was launched to lead Capital Group's growth by providing broad access to telehealth services in conjunction with new urgent care clinics in each new state.
OneHealth Urgent Care
OneHealth Urgent Care ("OneHealth UC" or "OHUC") provides walk-in, extended hour access for acute illness and injury care that is either beyond the scope or availability of the typical primary care practice or retail clinic, or a referral service from a OneHealthPassTM member. OHUC centers are full-service board certified-staffed urgent care clinics that provide convenient access to affordable, high-quality care for episodic acute events requiring immediate attention, initially serving the greater metro Phoenix community.
OneHealth Urgent Care customers experience an average service time (check-in to check-out) of under 40 minutes (better than industry average), versus more than four hours, on average, for ER wait times. The cost of an urgent care visit is one-sixth the cost of an ER visit. OHUC provides care on a walk-in basis between 8 am and 8 pm, the hours which account for 80% of ER visits. OneHealth Urgent Care's performance has exceeded expectations. OHUC revenues exceeded $5.4 million in 2011, growing at least 30% since 2010.
Additional OneHealth Urgent Care facts include:
. . .
On November 14, 2012, our Board of Directors appointed the following director to fill vacancy on our board:
1. Dr. Michael Blumhoff, MD
Dr. Michael Blumhoff, MD
Since its inception on March 7, 2007, Dr. Blumhoff has acted as the President, CEO and acting medical director of Alliance Urgent Care, an Arizona based urgent care company. Dr. Blumhoff's duties include oversight of all aspects of the business including physician management, business expansion, clinical and financial efficiencies, quality improvement and quality assurance projects, especially as they pertain to laboratory and radiologic practices in the urgent care setting. In 5 years, Dr. Blumhoff has grown the business to 7 operating centers. It is a testament to his established efficiencies that his success with Alliance Urgent Care has been achieved with no capital funding and minimal debt.
Prior to Dr. Blumhoff's work with Alliance Urgent Care, he was the medical director for a large, national urgent care company from November 2002 through September 2006 where he oversaw physician management and all clinic processes and helped manage business growth from 5 to over 26 clinics in 4 years. It was here that his business side of medicine was cultivated, constantly working to maximize efficiencies in patient care while maximizing positive outcomes. He oversaw all quality improvement projects, which focused on patient driven outcomes as a means to reduce clinic liability and ensure the delivery of high quality patient care.
Dr. Blumhoff obtained his medical degree from Stritch School of Medicine at Loyola University in Chicago. He completed his residency in Family Medicine at St. Joseph's Hospital and Medical Center in Phoenix, AZ. His leadership skills were quickly recognized by peers and faculty and he was appointed the chief resident position during his third year.
Dr. Blumhoff is a board certified Family Physician, a certified Medical Review Officer, a member of the American Academy of Family Physicians, the American College of Physician Executives, and the Urgent Care Association of America.
MCS Ventures I through VII, P.C. da Alliance Urgent Care F-2 Combined Balance Sheets for the years ended June 30, 2012 and June 30, 2011
MCS Ventures I through VII, P.C. da Alliance Urgent Care Combined Statements of Operations for the years ended F-3 June 30, 2012 and June 30, 2011
MCS Ventures I through VII, P.C. da Alliance Urgent Care F-4 Combined Statements of Changes in Shareholder's Equity for the years ended June 30, 2012 and June 30, 2011
MCS Ventures I through VII, P.C. da Alliance Urgent Care F-5 Combined Statements of Cash Flows for the years ended June 30, 2012 and June 30, 2011
Semple, Marchal & Cooper, LLP
Certified Public Accountants and Consultants
Board of Directors and Shareholders
MCS Ventures I through VII, P.C. dba Alliance Urgent Care
We have audited the accompanying combined balance sheets of MCS Ventures I through VII, P.C. dba Alliance Urgent Care (the "Company") as of June 30, 2012 and 2011, and the related combined statements of operations, changes in shareholders' equity, 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 the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, 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.
In our opinion, the combined financial statements referred to above present fairly, in all material respects, the combined financial position of MCS Ventures I through VII, P.C. dba Alliance Urgent Care as of June 30, 2012 and 2011 and the results of its combined operations, changes in shareholders' equity, and its cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States of America.
Certified Public Accountants
/s/ Semple, Marchal & Cooper, LLP
Phoenix, Arizona
November 19, 2012
MCS VENTURES I THROUGH VII, P.C.
dba ALLIANCE URGENT CARE
COMBINED BALANCE SHEETS
June 30,
2012 2011
Assets:
Cash and cash equivalents $ 1,114,383 $ 1,520,358
Accounts receivable, net 512,438 580,335
Prepaid advertising, Capital Group Holdings, 190,000 -
Inc.
Prepaid expenses 95,809 61,287
Total current 1,912,630 2,161,980
assets
Fixed assets, at cost 1,050,072 901,334
Less: accumulated depreciation (512,698) (367,284)
Fixed assets, net 537,374 534,050
Deposits 65,703 41,354
Total assets $ 2,515,707 $ 2,737,384
Liabilities and shareholders'
equity:
Accounts payable $ 159,780 $ 149,814
Accrued expenses 294,177 207,989
Notes payable and lines of credit - current 58,715 347,464
portion
Capital leases - current 36,166 62,652
portion
Other current 13,186 3,371
liabilites
Total current 562,024 771,290
liabilities
Capital leases - long-term - 36,178
portion
Notes payable - long-term 76,967 135,683
portion
Total 638,991 943,151
liabilities
Shareholders' equity:
Common stock 1,000 1,000
Retained earnings 1,875,716 1,793,233
Total shareholders' 1,876,716 1,794,233
equity
Total liabilities and shareholders' $ 2,515,707 $ 2,737,384
equity
|
MCS VENTURES I THROUGH VII, P.C.
dba ALLIANCE URGENT CARE
COMBINED STATEMENTS OF OPERATIONS
For the Years Ended June 30,
2012 2011
Revenues $ 5,973,689 $ 5,426,149
Cost of revenues 4,428,092 3,495,951
Gross profit 1,545,597 1,930,198
General and administrative expenses 1,129,597 999,895
Depreciation expense 145,414 123,690
Income from operations 270,586 806,613
Other income (expense):
Interest expense (30,766) (31,810)
(30,766) (31,810)
Net income before pro forma taxes 239,820 774,803
Provision for taxes - pro forma (95,928) (309,925)
Net income - pro forma $ 143,892 $ 464,878
|
MCS VENTURES I THROUGH VII, P.C.
dba ALLIANCE URGENT CARE
COMBINED STATEMENTS OF CHANGES IN SHAREHOLDER'S EQUITY
Common Stock
Number of Shares
Outstanding - Retained
Combined Amount Earnings Total
Balance at June 30, 2010 7,000 $ 1,000 $ 1,119,857 $ 1,120,857
Net income - - 774,803 774,803
Distributions to shareholders' - - (101,427) (101,427)
Balance at June 30, 2011 7,000 1,000 1,793,233 1,794,233
Net income - - 239,820 239,820
Distributions to shareholders' - - (157,337) (157,337)
Balance at June 30, 2012 7,000 $ 1,000 $ 1,875,716 $ 1,876,716
|
MCS VENTURES I THROUGH VII, P.C.
dba ALLIANCE URGENT CARE
COMBINED STATEMENTS OF CASH FLOWS
For the Year Ended June 30,
2012 2011
Increase (decrease) in cash
and cash equivalents:
Cash flows from
operating
activities:
Net income $ 239,820 $ 774,803
Adjustments to reconcile
net income to net cash
provided by
operating
activities:
Depreciation 145,414 123,690
Reserve for bad debts (19,150) 19,033
and discounts
Changes in operating assets
and liabilities:
Accounts 87,047 (86,516)
receivable
Prepaid (190,000) -
advertising
Prepaid (34,522) (4,593)
expenses
Deposits (24,349) (12,450)
Accounts 9,966 61,084
payable
Accrued 86,188 55,138
expenses
Other current 9,815 (1,358)
liabilities
Net cash 310,229 928,831
provided by
operating
activities
Cash flows from
investing
activities:
Captial (148,738) (271,776)
expenditures
Net cash used (148,738) (271,776)
in investing
activities
Cash flows from
financing
activities:
Proceeds from - 150,000
note payable
Repayments of (58,108) (46,128)
notes payable
Repayments of lines of (289,357) (74,583)
credit, net
Payments for capital (62,664) (60,914)
lease obligations
Repayments of - (31,775)
shareholder
loans
Distributions to (157,337) (101,427)
shareholders and
members
Net cash (567,466) (164,827)
provided by
(used in)
financing
activities
Net increase (decrease) in (405,975) 492,228
cash and cash equivalents
Cash and cash equivalents 1,520,358 1,028,130
at beginning of year
Cash and cash $ 1,114,383 $ 1,520,358
equivalents at end
of year
Supplemental disclosure of
cash flow information:
Interest paid $ 30,766 $ 31,810
Income taxes $ - $ -
paid
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