-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, HVId+PkIuv99G+7ymvbd8Df8YyV2a1Ti9NqwWSDD6aFuV9Q0mdsfDYTBXV8GlPoI 97ktrf57meBLp3GtgbhDzQ== 0000950133-97-001754.txt : 19970512 0000950133-97-001754.hdr.sgml : 19970512 ACCESSION NUMBER: 0000950133-97-001754 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 19970331 FILED AS OF DATE: 19970509 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: APACHE MEDICAL SYSTEMS INC CENTRAL INDEX KEY: 0000883697 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-COMPUTER INTEGRATED SYSTEMS DESIGN [7373] IRS NUMBER: 232476415 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-20805 FILM NUMBER: 97599795 BUSINESS ADDRESS: STREET 1: 1650 TYSONS BLVD CITY: MCLEAN STATE: VA ZIP: 22102 BUSINESS PHONE: 7038471400 MAIL ADDRESS: STREET 1: 1650 TYSONS BLVD CITY: MCLEAN STATE: VA ZIP: 22102 10-Q 1 FORM 10-Q FOR QUARTER ENDED 3/31/97 1 FORM 10-Q SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 (x) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 1997 ------------------------------------ or ( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to ------------- ------------- Commission file number 000-20805 -------------------------------------------- APACHE MEDICAL SYSTEMS, INC. - ------------------------------------------------------------------- (Exact name of registrant as specified in its charter) Delaware 23-2476415 - ----------------------- ------------------ (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 1650 Tysons Boulevard, McLean, Virginia 22102 - --------------------------------------- -------- (Address of principal executive offices) (Zip Code) (703) 847-1400 ------------ (Registrant's telephone number, including area code) - ------------------------------------------------------------------------------- (Former name, former address and former fiscal year, if changed since last report) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for 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 ----- ----- 6,871,353 --------- (Number of shares of common stock outstanding as of May 9, 1997) 2 APACHE MEDICAL SYSTEMS, INC. INDEX
Page No. Part I - Financial Information Item 1 - Financial Statements Consolidated Statements of Operations (unaudited) - three months ended March 31, 1997 and 1996 1 Consolidated Balance Sheets -- March 31, 1997 (unaudited) and December 31, 1996 2 Consolidated Statements of Changes in Stockholders' Equity (Deficit) - three months ended March 31, 1997 (unaudited) and year ended December 31, 1996 3 Consolidated Statements of Cash Flows (unaudited) - three months ended March 31, 1997 and 1996 4 Notes to Consolidated Financial Statements (unaudited) 5-6 Item 2 - Management's Discussion and Analysis of Financial Condition and Results of Operations 7-9 Part II - Other Information Item 2 - Changes in Securities 10 Item 5 - Other Information 10 Item 6 - Exhibits and Reports on Form 8--K 11-12 Signatures 13
3 APACHE MEDICAL SYSTEMS, INC. CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited)
FIRST QUARTER ENDED MARCH 31, (in thousands, except per share data) 1997 1996 -------------- -------------- Revenue: Systems and related products $ 1,445 $ 1,242 Support 476 330 Professional services 479 87 -------------- ------------ Total revenue 2,400 1,659 Expenses: Cost of systems and related products 725 563 Cost of support 131 123 Cost of professional services 451 67 Research and development 672 364 Selling, general and administrative 2,818 1,445 Write-off of acquired in-process research and development costs 1,112 - -------------- ------------ Total expenses 5,909 2,562 Loss from operations (3,509) (903) Other income (expense): Interest income 234 58 Interest expense (7) (106) -------------- ------------ Total other income (expense) 227 (48) Net loss $ (3,282) $ (951) ============== =========== Net loss per share $ (0.48) $ (0.19) ============== =========== Weighted average number of shares used for calculation of net loss per share 6,871 4,628 ============== ===========
See accompanying notes to consolidated financial statements. 1 4 APACHE MEDICAL SYSTEMS, INC. CONSOLIDATED BALANCE SHEETS
(in thousands except share data) MARCH 31, DECEMBER 31, 1997 1996 --------------- -------------- ASSETS (unaudited) CURRENT ASSETS: Cash and cash equivalents $ 16,385 $ 20,671 Short-term investments 993 993 Accounts receivable, net of allowance for doubtful accounts of $234 3,089 3,117 in 1997 and $102 in 1996 Other trade receivables 147 205 Prepaid expenses and other 596 620 -------- -------- TOTAL CURRENT ASSETS 21,210 25,606 Other trade receivables, net of current maturities 95 104 Furniture and equipment 2,930 2,683 Less accumulated depreciation and amortization (1,643) (1,495) -------- -------- 1,287 1,188 Capitalized software development costs, net 479 374 Intangible assets, net 1,164 714 -------- -------- TOTAL ASSETS $ 24,235 $ 27,986 ======== ======== LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES: Accounts payable $ 556 $ 607 Accrued expenses 2,602 2,476 Purchase acquisition costs - 1,565 Current maturities of obligations under capital leases 35 57 Current maturities of notes payable - other 90 90 Deferred revenue 1,832 1,017 -------- -------- TOTAL CURRENT LIABILITIES 5,115 5,812 Deferred rent benefit 150 159 Obligations under capital leases, net of current maturities - 2 Notes payable - stockholders, net of current maturities 100 100 Notes payable - other, net of current maturities 86 91 -------- -------- TOTAL LIABILITIES 5,451 6,164 STOCKHOLDERS' EQUITY : Common stock, $.01 par value, authorized shares, 30,000,000 at March 31, 1997 and December 31, 1996; issued and outstanding shares, 6,871,353 at March 31, 1997 and December 31, 1996 69 69 Additional paid-in capital 45,566 45,322 Accumulated deficit (26,851) (23,569) -------- -------- TOTAL STOCKHOLDERS' EQUITY 18,784 21,822 -------- -------- TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 24,235 $ 27,986 ======== ========
See accompanying notes to consolidated financial statements 2 5 APACHE MEDICAL SYSTEMS, INC. CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT)
COMMON STOCK ADDITIONAL ---------------------- PAID-IN (in thousands, except share data) SHARES AMOUNT CAPITAL ---------- ---------- ------------- BALANCE AT JANUARY 1, 1996 1,075,458 $11 $ 1,363 Issuance of common stock 788 - 7 Issuance of common stock through initial public offering 2,300,000 23 27,577 Accretion of cumulative dividends and issue costs on redeemable preferred stock - - - Conversion of convertible preferred stock 3,294,519 33 20,017 Conversion of convertible debt 122,257 1 999 Conversion of cumulative dividends on redeembable preferred stock 78,331 1 939 Reclass cumulative dividends on redeemable preferred stock to APIC - - (1,850) Reclass accreted issue costs on redeemable preferred stock to APIC - - (608) Reclass unaccreted issue costs on redeemable preferred stock to APIC - - (526) Issuance costs of initial public offering - - (3,034) Issuance of common stock options - - 438 Net loss - - - --------- --------- --------- BALANCE AT DECEMBER 31, 1996 6,871,353 69 45,322 Issuance of common stock options - - 244 Net loss - - - ========= ========= ========= BALANCE AT MARCH 31, 1997 (UNAUDITED) 6,871,353 $69 $45,566 ========= ========= =========
CUMULATIVE DIVIDENDS AND ACCRETED ISSUE COSTS ON CUMULATIVE REDEEMABLE ACCUMULATED (in thousands, except share data) PREFERRED STOCK DEFICIT TOTAL ---------------- ----------- --------- BALANCE AT JANUARY 1, 1996 ($1,779) ($ 17,908) ($18,313) Issuance of common stock - - 7 Issuance of common stock through initial public offering - - 27,600 Accretion of cumulative dividends and issue costs on redeemable preferred stock (679) - (679) Conversion of convertible preferred stock - - 20,050 Conversion of convertible debt - - 1,000 Conversion of cumulative dividends on redeembable preferred stock - - 940 Reclass cumulative dividends on redeemable preferred stock to APIC 1,850 - - Reclass accreted issue costs on redeemable preferred stock to APIC 608 - - Reclass unaccreted issue costs on redeemable preferred stock to APIC - - (526) Issuance costs of initial public offering - - (3,034) Issuance of common stock options - - 438 Net loss - (5,661) (5,661) ---------- --------- -------- BALANCE AT DECEMBER 31, 1996 (23,569) 21,822 Issuance of common stock options - - 244 Net loss - (3,282) (3,282) ========== ========= ======== BALANCE AT MARCH 31, 1997 (UNAUDITED) - ($26,851) $18,784 ========== ========= ========
See accompanying notes to consolidated financial statements. 3 6 APACHE MEDICAL SYSTEMS, INC. CONSOLIDATED STATEMENTS OF CASH FLOW (unaudited)
FIRST QUARTER ENDED MARCH 31, (in thousands) 1997 1996 -------------- ----------- CASH FLOWS FROM OPERATING ACTIVITIES: Net loss $ (3,282) $ (951) Adjustments to reconcile net loss to net cash used in operating activities: Depreciation and amortization 255 216 Provision for doubtful accounts 153 25 Accretion of interest - 66 Stock options issued 21 - Write-off of acquired in-process research and development costs 1,112 - Changes in operating assets and liabilities: Accounts receivable (126) (807) Other trade receivables 67 54 Other current assets (8) (26) Intangible assets (35) - Accounts payable and accrued expenses 75 (94) Deferred rent (9) (5) Deferred revenue 814 267 -------- -------- NET CASH USED IN OPERATING ACTIVITIES (963) (1,255) CASH FLOWS FROM INVESTING ACTIVITIES: Capitalized software development costs (127) (42) Purchase of furniture and equipment, net of disposals (253) (6) Purchase acquisitions (2,915) - --------- --------- NET CASH USED IN INVESTING ACTIVITIES (3,295) (48) CASH FLOWS FROM FINANCING ACTIVITIES: Principal payments on capital lease obligations (23) (42) Principal payments on borrowings (5) (28) Proceeds from issuance of preferred stock, net of issuance costs - (37) Proceeds from issuance of common stock upon exercise of options - 1 --------- --------- NET CASH USED IN FINANCING ACTIVITIES (28) (106) --------- --------- NET DECREASE IN CASH AND CASH EQUIVALENTS (4,286) (1,409) CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 20,671 4,036 --------- --------- CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 16,385 $ 2,627 ========= ========= SUPPLEMENTAL INFORMATION: Cash payments for interest $ 8 $ 15 ========= =========
See accompanying notes to consolidated financial statements. 4 7 APACHE MEDICAL SYSTEMS, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) 1. BASIS OF PRESENTATION The accompanying consolidated financial statements have been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission ("SEC"). The financial information included herein is unaudited, however, in the opinion of management, all adjustments (which include normal recurring adjustments) considered necessary for a fair presentation have been made. Certain information and footnote disclosures normally included in annual financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations, but the Company believes that the disclosures made are adequate to make the information presented not misleading. For more complete financial information, these financial statements should be read in conjunction with the audited financial statements and notes thereto for the year ended December 31, 1996 included in the Company's annual report. Results for interim periods are not necessarily indicative of the results for any other interim period or for the full fiscal year. 2. ACQUISITION In January 1997, the Company acquired the assets of CardioMac, a point-of-care data collection and reporting tool for the cardiac catheterization laboratory and cardiovascular operating room from Iowa Health Centers, P.C. d/b/a Iowa Heart Center, P.C., Mercy Hospital Medical Center, Mark A. Tannenbaum, M.D. and Iowa Heart Institute. The purchase price for this acquisition was $1.35 million in cash and options to purchase 150,000 shares of APACHE Common Stock for a total value of $1.57 million. These assets have unique capabilities including the provision of standard and customized individual patient and group reports for PTCA and CABG patients. The acquisition has been accounted for using the purchase method of accounting and resulted in intangible assets totaling $482,000. The intangible assets consist of software technology of $271,000, assembled workforce of $15,000 and goodwill of $196,000. These assets are being amortized over 5 to 15 years. In connection with the acquisition, the Company also acquired and recorded a non-recurring charge related to acquired in-process research and development costs of approximately $1.1 million during the first quarter of 1997. The purchase price allocation and lives of assets were determined by an independent appraiser. 5 8 3. LOSS PER SHARE Loss per share is computed based on the weighted average number of shares of common stock and dilutive common stock equivalents outstanding during the period. Stock options and warrants were excluded because the effects would be antidilutive. 4. NEW ACCOUNTING PRONOUNCEMENT Statement of Financial Accounting Standards No. 128, "Earnings per Share" changes the reporting requirements for earnings per share ("EPS") for publicly traded companies by replacing primary EPS with basic EPS. The Company is required to adopt this standard for its December 31, 1997 year-end. Since the effect of outstanding options and warrants is antidilutive, management does not believe that statement No. 128 will have an impact on net loss per share as reported. 6 9 APACHE MEDICAL SYSTEMS, INC. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS - THREE MONTHS ENDED MARCH 31, 1997 AND 1996 RESULTS OF OPERATIONS CONSOLIDATED REVENUE. Revenue for the quarter ended March 31, 1997 increased 45% to $2.4 million from $1.7 million in the prior year period. SYSTEMS AND RELATED PRODUCTS REVENUE. Systems and related products revenue for the quarter ended March 31, 1997, increased 16% to $1.4 million from $1.2 million in the prior year period. The increase in revenue was due primarily to the recording of revenue relating to the percentage of completion method of accounting for 1996 system and benchmark sales. This was partially offset by a decrease in system sales for the quarter ended March 31, 1997 compared to the same period in the prior year. SUPPORT REVENUE. Support revenue for the quarter ended March 31, 1997 increased 44% to $476,000 from $330,000 in the prior year period due to the increase in the number of clients utilizing the Company's systems. PROFESSIONAL SERVICES REVENUE. Professional services revenue for the quarter ended March 31, 1997 increased 451% to $479,000 from $87,000 for the prior year period. The increase is due primarily to the services and studies provided by Health Research Network (HRN), acquired by APACHE in December 1996. HRN manages an ongoing epidemiological study under a cooperative agreement with the Centers for Disease Control and provides HIV-related information services and studies distributed through IMS America to the pharmaceutical industry. COST OF SYSTEMS AND RELATED PRODUCTS. Cost of systems and related products for the quarter ended March 31, 1997 increased 29% to $725,000 from $563,000 in the prior year period, due to the additional staffing requirements needed to support the Company's growth in systems and benchmark revenue. Cost of systems and related products for the first quarter increased to 50% of systems and related products revenue from 45% in the prior year period, due to the same factors as noted above, which were only partially offset by an increase in revenue. COST OF SUPPORT. Cost of support for the quarter ended March 31, 1997 increased 7% to $131,000 from $123,000 in the prior year period, due to the additional staffing requirements needed to support the Company's larger client base. Cost of support for the first quarter decreased to 28% of support revenue from 37% in the prior year period, due to the increase in revenue, which more than offset the increase in cost of support. 7 10 COST OF PROFESSIONAL SERVICES. Cost of professional services for the quarter ended March 31, 1997 increased 573% to $451,000 from $67,000 in the prior year period, due to the costs associated with the services and studies provided by HRN, as explained above, and the additional staffing required to support the anticipated sales in customized consulting and disease management services. Cost of professional services for the first quarter increased to 94% of professional services revenue from 77% in the prior year period, due to the same factors as noted above, partially offset by an increase in revenue. RESEARCH AND DEVELOPMENT. Research and development expenses for the quarter ended March 31, 1997 increased 85% to $672,000 from $364,000 in the prior year period, due primarily to an increase in staffing requirements related to the enhancement of current product lines as well as development activities for new products and services. During the first quarter of 1997, $128,000 of product development costs were capitalized, compared to $42,000 in the prior year period. Research and development expenses for the first quarter of 1997 increased to 28% of revenue from 22% in the prior year period, due to the same factors as noted above, which were only partially offset by an increase in revenue. SELLING, GENERAL AND ADMINISTRATIVE. Selling, general and administrative expenses for the quarter ended March 31, 1997 increased 95% to $2.8 million from $1.4 million in the prior year period, due primarily to overhead costs associated with the increase in staffing throughout the Company, an increase in sales and marketing related activities and an increase in expenses associated with public reporting requirements. Selling, general and administrative expenses for the first quarter of 1997 increased to 117% of revenue from 87% for the prior year period, due primarily to the same factors as noted above, which were only partially offset by an increase in revenue. WRITE-OFF OF ACQUIRED IN-PROCESS RESEARCH AND DEVELOPMENT COSTS. In January 1997, the Company acquired the assets of CardioMac, a point-of-care data collection and reporting tool for the cardiac catheterization laboratory and cardiovascular operating room from Iowa Health Centers, P.C. d/b/a Iowa Heart Center, P.C., Mercy Hospital Medical Center, Mark A. Tannenbaum, M.D. and Iowa Heart Institute. At the time of the acquisition, the Company recorded a non-recurring charge resulting from the write-off of the acquired in-process research and development costs. This charge totaled $1.1 million or 46% of the Company's revenue for the first quarter of 1997. OTHER INCOME(EXPENSE). Other income (expense) increased from ($48,000) for the quarter ended March 31, 1996 to $227,000 for the quarter ended March 31, 1997. The increase is attributable to interest income earned from the investment of the net proceeds from the initial public offering of the Company's Common Stock in July 1996 and a decrease in interest-bearing notes payable. 8 11 LIQUIDITY AND CAPITAL RESOURCES Cash and short-term investments were $17.4 million as of March 31, 1997 compared to $21.7 million as of December 31, 1996. In December 1996, the Company completed the acquisition of the assets and certain liabilities of Health Research Network for $1.57 million in cash paid in January 1997. In January 1997, the Company acquired the assets of CardioMac from Iowa Health Centers, P.C. d/b/a Iowa Heart Center, P.C., Mercy Hospital Medical Center, Mark A. Tannenbaum, M.D. and Iowa Heart Institute for a payment of $1.35 million in cash and options to purchase 150,000 shares of APACHE Common Stock. Each of these acquisitions has been accounted for using the purchase method of accounting and, accordingly, the assets have been valued at their estimated fair value. Funding for the acquisitions was provided by the proceeds of the Company's public offering completed in July 1996. In April 1997, the Company entered into a secured revolving line of credit from Crestar Bank providing for a borrowing capacity of $2.0 million. Borrowings bear interest at a fluctuating rate equal to the Bank's prime rate plus 0.25%. The Company also pays an annual fee on the total borrowing capacity of $2.0 million at a rate of 0.75% per annum. Borrowings are collateralized by the Company's accounts receivable and all other uncommitted assets. The line of credit expires on May 31, 1997 and contains an automatic renewal that expires on May 31, 1998, subject to the borrowers compliance with all terms and conditions of the agreement. There are currently no borrowings under the line of credit. The Company anticipates that net proceeds from the initial public offering and funds generated from operations will be sufficient to meet its planned ongoing working capital requirements and to finance planned product development, sales and marketing activities and capital acquisitions for the next twelve months. 9 12 PART II - OTHER INFORMATION Item 2: Changes in Securities The Company acquired certain assets of Iowa Health Centers, P.C. d/b/a Iowa Heart Center, P.C. ("IHC"), Mercy Hospital Medical Center ("Mercy"), Mark A. Tannenbaum, M.D. and Iowa Heart Institute pursuant to an Asset Purchase Agreement dated as of January 7, 1997. As part of the consideration for the acquired assets, the Company granted an option to purchase 50,000 shares of Common Stock, par value $.01 per share, to each of IHC, Mercy and Dr. Tannenbaum. The options are fully exercisable and the exercise price of the options is $7.75 per share, the fair market value of the Company's Common Stock on January 7, 1997, the date of grant. The shares issuable upon the exercise of the options will be issued without the benefit of an effective registration statement under the Securities Act of 1933, as amended (the "Act") in reliance upon the private placement exemption under Section 4(2) of the Act in that they did not involve a public offering or sale of the Company's securities. The parties, however, have entered into a Registration Agreement, dated as of January 7, 1997, pursuant to which IHC, Mercy and Dr. Tannenbaum have certain rights to participate in certain registrations by the Company of its Common Stock. Item 5: Other Information In connection with the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, the Company believes that a number of important factors could cause the Company's actual results to differ from those that may have been or may be projected in forward-looking statements made by or on behalf of the Company from time to time. These factors are described under the heading "Risk Factors" in the Company's Annual Report on Form 10-K, filed with the Securities and Exchange Commission on March 20, 1997. Specific reference is made to the Risk Factors set forth therein entitled "History of Operating Losses and Accumulated Deficit; Expected Losses; Uncertainty of Future Profitability", "Fluctuations in Quarterly Operating Results", "Uncertainty of Market Acceptance" and "State and Federal Government Regulation". 10 13 Item 6: Exhibits and Reports on Form 8--K - ------- --------------------------------- (a) Exhibits --
Exhibit Number Description - ------- ----------- 2.1 Asset Purchase Agreement by and among the Company and Dun & Bradstreet HealthCare Information, Inc. and Cognizant Corporation dated as of December 30, 1996* 2.2 Asset Purchase Agreement by and among the Company and Iowa Health Centers, P.C. d/b/a Iowa Heart Center, P.C., Mercy Hospital Medical Center, Mark A. Tannenbaum, M.D. and Iowa Heart Institute dated as of January 7, 1997* 3.1 Amended and Restated Certificate of Incorporation** 3.2 By-Laws** 4.1 Specimen Common Stock Certificate** 10.1 APACHE Medical Systems, Inc. Employee Stock Option Plan+** 10.2 APACHE Medical Systems, Inc. Non-Employee Director Option Plan+** 10.3 Sublease Agreement between the Company and First Union National Bank of Virginia, dated March 17, 1994** 10.4 Registration Agreement between the Company and Certain Stockholders, dated December 28, 1995** 10.5 Form of Warrant Agreement relating to warrants issued in 1995** 10.6 Warrant Agreement between the Company and Venture Fund of Washington, dated May 13, 1991** 10.7 Licensing Agreement between the Company and Cerner Corporation, dated February 2, 1995** 10.8 Nonqualified Stock Option Agreement between the Company and The Cleveland Clinic Foundation, dated August 19, 1994** 10.9 Agreement between the Company and The George Washington University, dated August 19, 1994** 10.10 Letter Agreement between the Company and the Northern New England Cardiovascular Disease Study Group, dated March 13, 1995**
11 14 10.11 Licensing Agreement between the Company and Quality Information Management Corporation, dated March 24, 1994** 10.12 Marketing Agreement between the Company and American Healthcare Systems Purchasing Partners, L.P., dated as of June 3, 1996** 10.13 Registration Agreement between the Company and each of Iowa Health Centers, P.C. d/b/a Iowa Heart Center, P.C., Mercy Hospital Medical Center, Mark A. Tannenbaum, M.D. and Iowa Heart Institute dated January 7, 1997* 10.14 Nonqualified Stock Option Agreements between the Company and each of Iowa Health Centers, P.C. d/b/a Iowa Heart Center, P.C., Mercy Hospital Medical Center and Mark A. Tannenbaum, M.D., dated January 7, 1997. 11.1 Computation of Earnings Per Share 21.1 List of Subsidiaries of the Company** 27.1 Financial Data Schedule - ------------- + Denotes compensatory plan. * Incorporated herein by reference from the Company's Report on Form 8-K filed on January 14, 1997. ** Incorporated herein by reference from the Company's Registration Statement on Form S-1, SEC file no. 333-4106, initially filed on April 26, 1996. (b) Reports on Form 8--K -- December 30, 1996 (filed January 14, 1997) - Item 2. Acquisition or Disposition of Assets. Re: Acquisition of assets of Dun & Bradstreet HealthCare Information, Inc. and of Iowa Health Centers, P.C. d/b/a Iowa Heart Center, P.C., Mercy Hospital Medical Center, Mark A. Tannenbaum, M.D. and Iowa Heart Institute. March 21, 1997 (filed March 28, 1997, amending Form 8-K filed February 20, 1997) - Item 4. Changes in Registrant's Certifying Accountant. Re: Termination of KPMG Peat Marwick as the Company's principal accountants and engagement of Arthur Andersen LLP as the Company's new principal accountants. 12 15 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 thereunto duly authorized. APACHE MEDICAL SYSTEMS, INC. Date: May 9, 1997 /s/Gerald E. Bisbee, Jr. ------------ ------------------------- Gerald E. Bisbee, Jr. Chairman, Chief Executive Officer and President Date: May 9, 1997 /s/Brion D. Umidi ------------- ------------------ Brion D. Umidi Vice President, Finance and Administration, Treasurer and Chief Financial Officer (Chief Financial and Accounting Officer) Date: May 9, 1997 /s/Lisa M. Clements ------------- -------------------- Lisa M. Clements Controller and Assistant Treasurer 13 EX-10.14 2 NONQUALIFIED STOCK OPTION AGREEMENT 1 EXHIBIT 10.14 APACHE MEDICAL SYSTEMS, INC. NONQUALIFIED STOCK OPTION AGREEMENT APACHE MEDICAL SYSTEMS, INC., a Delaware corporation (the "Company"), hereby grants to Iowa Health Centers, P.C., an Iowa professional corporation d/b/a Iowa Heart Center, P.C. ("Optionee"), an option (the "Option") to purchase a total of Fifty Thousand (50,000) shares (the "Shares") of Common Stock of the Company, at the price provided herein. 1. Nature of the Option. This Option is a non-statutory option and is not intended to qualify for any special tax benefits to Optionee. 2. Exercise Price. This exercise price is $7.75 for each share of Common Stock. 3. Exercise of Option. Subject to Section 6 hereof, this Option shall be exercisable during its term as follows: (i) Right to Exercise. This Option may be exercised in one or more tranches at any time from the date hereof through the tenth anniversary hereof. This Option may not be exercised for a fraction of a share. (ii) Method of Exercise. This Option shall be exercisable from time to time by written notice which shall state the number of Shares in respect of which this Option is being exercised. Such written notice shall be signed by Optionee or an authorized officer thereof, as the case may be, and shall be delivered in person or by certified mail to the Secretary of the Company. The written notice shall be accompanied by payment of the exercise price. No Shares will be issued pursuant to the exercise of this Option unless such issuance and such exercise shall comply with all relevant provisions of law and the requirements of any stock exchange upon which the Shares may then be listed. (iii) Number of Shares Exercisable. Each exercise of this Option hereunder shall reduce the total number of Shares that may thereafter be purchased under this Option. 4. Representations. In the event the Shares purchasable pursuant to the exercise of this Option have not been registered under the Securities Act of 1933, as amended ("Securities Act"), at the time this Option is exercised, Optionee or an authorized officer thereof, as the case may be, shall, concurrently with the exercise of all or any portion of this Option, deliver to the Company his or its Investment Representation Statement in the form attached hereto as Exhibit 1. 5. Method of Payment. Payment of the exercise price shall be by cash or check. 6. Restrictions on Exercise. This Option may not be exercised if the issuance of such Shares upon such exercise or the method of payment of consideration for such shares would constitute a violation of any applicable federal or state securities or other law or regulation, 2 including any rule under Part 207 of Title 12 of the Code of Federal Regulations ("Regulation G") as promulgated by the Federal Reserve Board. As a condition to the exercise of this Option, the Company may require Optionee or an officer thereof, as the case may be, to make any representation and warranty to the Company as may be required by any applicable law or regulation. 7. Non-Transferability of Option. This Option may not be sold, pledged, assigned, hypothecated, transferred or disposed of by Optionee in any manner other than by will or by the laws of descent or distribution and, in the case of an individual Optionee, may be exercised during the lifetime of Optionee only by him. The terms of this Option shall be binding upon the executors, administrators, heirs and successors of Optionee. 8. Stock Split. In the event of a stock split, stock dividend, recapitalization, reclassification or combination of shares or other similar event, the number of shares subject to outstanding options, the appropriate exercise price and other price determinations applicable to the options shall be adjusted to appropriately reflect such event. DATE OF GRANT: January 7, 1997 APACHE Medical Systems, Inc. a Delaware corporation By: /s/ Gerald E. Bisbee, Jr. ------------------------------ Name: Gerald E. Bisbee, Jr. ---------------------------- Title: Chairman and CEO --------------------------- By: /s/ Elizabeth A. Draper ------------------------------ Name: Elizabeth A. Draper --------------------------- Title: Secretary -------------------------- Agreed to this 7th day of January, 1997 Iowa Health Centers, P.C. d/b/a Iowa Heart Center, P.C. By: /s/ David F. Gordon, M.D., its President ------------------------------------------- By: /s/ Daniel C. Aten, its Administrator ------------------------------------------- -2- 3 EXHIBIT 1 INVESTMENT REPRESENTATION STATEMENT PURCHASER: Iowa Health Centers, P.C. d/b/a Iowa Heart Center, P.C. SELLER: APACHE MEDICAL SYSTEMS, INC. COMPANY: APACHE MEDICAL SYSTEMS, INC. SECURITY: COMMON STOCK AMOUNT: [Number of Shares exercised] DATE: [Date of exercise] In connection with the purchase of the above-listed Securities, the Purchaser represents to the Seller and to the Company, the following: (a) The Purchaser is aware of the Company's business affairs and financial condition, and has acquired all such information about the Company as it deems necessary and appropriate to enable it to reach an informed and knowledgeable decision to acquire the Securities. The Purchaser is purchasing these Securities for its own account for investment and not with a view to, or for the resale in connection with, any "distribution" thereof for purposes of the Securities Act of 1933, as amended ("Securities Act"). (b) The Purchaser understands that the Securities have not been registered under the Securities Act in reliance upon a specific exemption therefrom, which exemption depends upon, among other things, the bona fide nature of its investment intent as expressed herein. (c) The Purchaser further understands that the Securities may not be sold publicly and must be held indefinitely unless they are subsequently registered under the Securities Act or unless an exemption from registration is available. The Purchaser is able, without impairing its financial condition, to hold the Securities for an indefinite period of time and to suffer a complete loss on its investment. The Purchaser understands that the Company is under no obligation to it to register the Securities except as set forth in the Registration Agreement between Optionee and the Company dated January 7, 1997. In addition, the Purchaser understands that the certificate evidencing the Securities will be imprinted with a legend which prohibits the transfer of the Securities unless they are registered or such registration is not required in the opinion of counsel for the Company. (d) The Purchaser is familiar with the provisions of Rule 144, promulgated under the Securities Act, which, in substance, permits limited public resale of "restricted securities" acquired, directly or indirectly, from the issuer thereof (or from an affiliate of such issuer), in a non-public offering subject to the satisfaction of certain conditions, including, among other things: (i) the availability of certain public information about the Company; (ii) the resale -3- 4 occurring not less than two years after the party has purchased, and made full payment for, within the meaning of Rule 144, the securities to be sold; and, in the case of an affiliate, or of a non-affiliate who has held the securities less than three (3) years the sale being made through a broker in an unsolicited "broker's transaction" or in transactions directly with a market maker (as said term is defined under the Securities Exchange Act of 1934) and the amount of securities being sold during any three month period not exceeding the specified limitations stated therein, if applicable. (e) The Purchaser further understands that at the time it wishes to sell the Securities there may be no public market upon which to make such a sale, and that, even if such a public market then exists, the Company may not be satisfying the current public information requirements of Rule 144, and that, in such event, it would be precluded from selling the Securities under Rule 144 even if the two-year minimum holding period had been satisfied. It understands that the Company is under no obligation to it to make Rule 144 available. (f) The Purchaser further understands that in the event all of the applicable requirements of Rule 144 are not satisfied, registration under the Securities Act, compliance with Regulation A, or some other registration exemption will be required; and that, notwithstanding the fact that Rule 144 is not exclusive, the Staff of the Securities and Exchange Commission has expressed its opinion that persons proposing to sell private placement securities other than in a registered offering and otherwise than pursuant to Rule 144 will have a substantial burden of proof in establishing that an exemption from registration is available from such offers or sales, and that such persons and their respective brokers who participate in such transactions do so at their own risk. Iowa Health Centers, P.C. d/b/a Iowa Heart Center, P.C. By: ----------------------------- Name: --------------------------- Title: -------------------------- Date: ------------------------------ [Date of execution by Optionee] -4- 5 APACHE MEDICAL SYSTEMS, INC. NONQUALIFIED STOCK OPTION AGREEMENT APACHE MEDICAL SYSTEMS, INC., a Delaware corporation (the "Company"), hereby grants to Mark A. Tannenbaum, M.D. ("Optionee"), an option (the "Option") to purchase a total of Fifty Thousand (50,000) shares (the "Shares") of Common Stock of the Company, at the price provided herein. 1. Nature of the Option. This Option is a non-statutory option and is not intended to qualify for any special tax benefits to Optionee. 2. Exercise Price. This exercise price is $7.75 for each share of Common Stock. 3. Exercise of Option. Subject to Section 6 hereof, this Option shall be exercisable during its term as follows: (i) Right to Exercise. This Option may be exercised in one or more tranches at any time from the date hereof through the tenth anniversary hereof. This Option may not be exercised for a fraction of a share. (ii) Method of Exercise. This Option shall be exercisable from time to time by written notice which shall state the number of Shares in respect of which this Option is being exercised. Such written notice shall be signed by Optionee or an authorized officer thereof, as the case may be, and shall be delivered in person or by certified mail to the Secretary of the Company. The written notice shall be accompanied by payment of the exercise price. No Shares will be issued pursuant to the exercise of this Option unless such issuance and such exercise shall comply with all relevant provisions of law and the requirements of any stock exchange upon which the Shares may then be listed. (iii) Number of Shares Exercisable. Each exercise of this Option hereunder shall reduce the total number of Shares that may thereafter be purchased under this Option. 4. Representations. In the event the Shares purchasable pursuant to the exercise of this Option have not been registered under the Securities Act of 1933, as amended ("Securities Act"), at the time this Option is exercised, Optionee or an authorized officer thereof, as the case may be, shall, concurrently with the exercise of all or any portion of this Option, deliver to the Company his or its Investment Representation Statement in the form attached hereto as Exhibit 1. 5. Method of Payment. Payment of the exercise price shall be by cash or check. 6. Restrictions on Exercise. This Option may not be exercised if the issuance of such Shares upon such exercise or the method of payment of consideration for such shares would constitute a violation of any applicable federal or state securities or other law or regulation, 6 including any rule under Part 207 of Title 12 of the Code of Federal Regulations ("Regulation G") as promulgated by the Federal Reserve Board. As a condition to the exercise of this Option, the Company may require Optionee or an officer thereof, as the case may be, to make any representation and warranty to the Company as may be required by any applicable law or regulation. 7. Non-Transferability of Option. This Option may not be sold, pledged, assigned, hypothecated, transferred or disposed of by Optionee in any manner other than by will or by the laws of descent or distribution and, in the case of an individual Optionee, may be exercised during the lifetime of Optionee only by him. The terms of this Option shall be binding upon the executors, administrators, heirs and successors of Optionee. 8. Stock Split. In the event of a stock split, stock dividend, recapitalization, reclassification or combination of shares or other similar event, the number of shares subject to outstanding options, the appropriate exercise price and other price determinations applicable to the options shall be adjusted to appropriately reflect such event. DATE OF GRANT: January 7, 1997 APACHE Medical Systems, Inc. a Delaware corporation By: /s/ Gerald E. Bisbee, Jr. ----------------------------- Name: Gerald E. Bisbee, Jr. --------------------------- Title: Chairman and CEO -------------------------- By: /s/ Elizabeth A. Draper ----------------------------- Name: Elizabeth A. Draper --------------------------- Title: Secretary -------------------------- Agreed to this 7th day of January, 1997 Mark A. Tannenbaum, M.D. By: /s/ Mark A. Tannenbaum, M.D. -------------------------------- -2- 7 EXHIBIT 1 INVESTMENT REPRESENTATION STATEMENT PURCHASER: Mark A. Tannenbaum, M.D. SELLER: APACHE MEDICAL SYSTEMS, INC. COMPANY: APACHE MEDICAL SYSTEMS, INC. SECURITY: COMMON STOCK AMOUNT: [Number of Shares exercised] DATE: [Date of exercise] In connection with the purchase of the above-listed Securities, the Purchaser represents to the Seller and to the Company, the following: (a) I am aware of the Company's business affairs and financial condition, and have acquired all such information about the Company as I deem necessary and appropriate to enable me to reach an informed and knowledgeable decision to acquire the Securities. I am purchasing these Securities for my own account for investment and not with a view to, or for the resale in connection with, any "distribution" thereof for purposes of the Securities Act of 1933, as amended ("Securities Act"). (b) I understand that the Securities have not been registered under the Securities Act in reliance upon a specific exemption therefrom, which exemption depends upon, among other things, the bona fide nature of my investment intent as expressed herein. (c) I further understand that the Securities may not be sold publicly and must be held indefinitely unless they are subsequently registered under the Securities Act or unless an exemption from registration is available. I am able, without impairing my financial condition, to hold the Securities for an indefinite period of time and to suffer a complete loss on my investment. I understand that the Company is under no obligation to me to register the Securities except as set forth in the Registration Agreement between Optionee and the Company dated January 7, 1997. In addition, I understand that the certificate evidencing the Securities will be imprinted with a legend which prohibits the transfer of the Securities unless they are registered or such registration is not required in the opinion of counsel for the Company. (d) I am familiar with the provisions of Rule 144, promulgated under the Securities Act, which, in substance, permits limited public resale of "restricted securities" acquired, directly or indirectly, from the issuer thereof (or from an affiliate of such issuer), in a non-public offering subject to the satisfaction of certain conditions, including, among other things: (i) the availability of certain public information about the Company; (ii) the resale occurring not less than two years after the party has purchased, and made full payment for, within the meaning of Rule 144, the -3- 8 securities to be sold; and, in the case of an affiliate, or of a non-affiliate who has held the securities less than three (3) years the sale being made through a broker in an unsolicited "broker's transaction" or in transactions directly with a market maker (as said term is defined under the Securities Exchange Act of 1934) and the amount of securities being sold during any three-month period not exceeding the specified limitations stated therein, if applicable. (e) I further understand that at the time I wish to sell the Securities there may be no public market upon which to make such a sale, and that, even if such a public market then exists, the Company may not be satisfying the current public information requirements of Rule 144, and that, in such event, I would be precluded from selling the Securities under Rule 144 even if the two-year minimum holding period had been satisfied. I understand that the Company is under no obligation to me to make Rule 144 available. (f) I further understand that in the event all of the applicable requirements of Rule 144 are not satisfied, registration under the Securities Act, compliance with Regulation A, or some other registration exemption will be required; and that, notwithstanding the fact that Rule 144 is not exclusive, the Staff of the Securities and Exchange Commission has expressed its opinion that persons proposing to sell private placement securities other than in a registered offering and otherwise than pursuant to Rule 144 will have a substantial burden of proof in establishing that an exemption from registration is available from such offers or sales, and that such persons and their respective brokers who participate in such transactions do so at their own risk. By: ------------------------------ Mark A. Tannenbaum, M.D. Date: --------------------------------- [Date of execution by Optionee] -4- 9 APACHE MEDICAL SYSTEMS, INC. NONQUALIFIED STOCK OPTION AGREEMENT APACHE MEDICAL SYSTEMS, INC., a Delaware corporation (the "Company"), hereby grants to Mercy Hospital Medical Center, an Iowa not-for-profit corporation ("Optionee"), an option (the "Option") to purchase a total of Fifty Thousand (50,000) shares (the "Shares") of Common Stock of the Company, at the price provided herein. 1. Nature of the Option. This Option is a non-statutory option and is not intended to qualify for any special tax benefits to Optionee. 2. Exercise Price. This exercise price is $7.75 for each share of Common Stock. 3. Exercise of Option. Subject to Section 6 hereof, this Option shall be exercisable during its term as follows: (i) Right to Exercise. This Option may be exercised in one or more tranches at any time from the date hereof through the tenth anniversary hereof. This Option may not be exercised for a fraction of a share. (ii) Method of Exercise. This Option shall be exercisable from time to time by written notice which shall state the number of Shares in respect of which this Option is being exercised. Such written notice shall be signed by Optionee or an authorized officer thereof, as the case may be, and shall be delivered in person or by certified mail to the Secretary of the Company. The written notice shall be accompanied by payment of the exercise price. No Shares will be issued pursuant to the exercise of this Option unless such issuance and such exercise shall comply with all relevant provisions of law and the requirements of any stock exchange upon which the Shares may then be listed. (iii) Number of Shares Exercisable. Each exercise of this Option hereunder shall reduce the total number of Shares that may thereafter be purchased under this Option. 4. Representations. In the event the Shares purchasable pursuant to the exercise of this Option have not been registered under the Securities Act of 1933, as amended ("Securities Act"), at the time this Option is exercised, Optionee or an authorized officer thereof, as the case may be, shall, concurrently with the exercise of all or any portion of this Option, deliver to the Company his or its Investment Representation Statement in the form attached hereto as Exhibit 1. 5. Method of Payment. Payment of the exercise price shall be by cash or check. 6. Restrictions on Exercise. This Option may not be exercised if the issuance of such Shares upon such exercise or the method of payment of consideration for such shares would constitute a violation of any applicable federal or state securities or other law or regulation, 10 including any rule under Part 207 of Title 12 of the Code of Federal Regulations ("Regulation G") as promulgated by the Federal Reserve Board. As a condition to the exercise of this Option, the Company may require Optionee or an officer thereof, as the case may be, to make any representation and warranty to the Company as may be required by any applicable law or regulation. 7. Non-Transferability of Option. This Option may not be sold, pledged, assigned, hypothecated, transferred or disposed of by Optionee in any manner other than by will or by the laws of descent or distribution and, in the case of an individual Optionee, may be exercised during the lifetime of Optionee only by him. The terms of this Option shall be binding upon the executors, administrators, heirs and successors of Optionee. 8. Stock Split. In the event of a stock split, stock dividend, recapitalization, reclassification or combination of shares or other similar event, the number of shares subject to outstanding options, the appropriate exercise price and other price determinations applicable to the options shall be adjusted to appropriately reflect such event. DATE OF GRANT: January 7, 1997 APACHE Medical Systems, Inc. a Delaware corporation By: /s/ Gerald E. Bisbee, Jr. ----------------------------- Name: Gerald E. Bisbee, Jr. --------------------------- Title: Chairman and CEO -------------------------- By: /s/ Elizabeth A. Draper ----------------------------- Name: Elizabeth A. Draper --------------------------- Title: Secretary -------------------------- Agreed to this 7th day of January, 1997 Mercy Hospital Medical Center By: /s/ Thomas A. Reitinger, its President and CEO ----------------------------------------------- -2- 11 EXHIBIT 1 INVESTMENT REPRESENTATION STATEMENT PURCHASER: Mercy Hospital Medical Center SELLER: APACHE MEDICAL SYSTEMS, INC. COMPANY: APACHE MEDICAL SYSTEMS, INC. SECURITY: COMMON STOCK AMOUNT: [Number of Shares exercised] DATE: [Date of exercise] In connection with the purchase of the above-listed Securities, the Purchaser represents to the Seller and to the Company, the following: (a) The Purchaser is aware of the Company's business affairs and financial condition, and has acquired all such information about the Company as it deems necessary and appropriate to enable it to reach an informed and knowledgeable decision to acquire the Securities. The Purchaser is purchasing these Securities for its own account for investment and not with a view to, or for the resale in connection with, any "distribution" thereof for purposes of the Securities Act of 1933, as amended ("Securities Act"). (b) The Purchaser understands that the Securities have not been registered under the Securities Act in reliance upon a specific exemption therefrom, which exemption depends upon, among other things, the bona fide nature of its investment intent as expressed herein. (c) The Purchaser further understands that the Securities may not be sold publicly and must be held indefinitely unless they are subsequently registered under the Securities Act or unless an exemption from registration is available. The Purchaser is able, without impairing its financial condition, to hold the Securities for an indefinite period of time and to suffer a complete loss on its investment. The Purchaser understands that the Company is under no obligation to it to register the Securities except as set forth in the Registration Agreement between Optionee and the Company dated January 7, 1997. In addition, the Purchaser understands that the certificate evidencing the Securities will be imprinted with a legend which prohibits the transfer of the Securities unless they are registered or such registration is not required in the opinion of counsel for the Company. (d) The Purchaser is familiar with the provisions of Rule 144, promulgated under the Securities Act, which, in substance, permits limited public resale of "restricted securities" acquired, directly or indirectly, from the issuer thereof (or from an affiliate of such issuer), in a non-public offering subject to the satisfaction of certain conditions, including, among other things: (i) the availability of certain public information about the Company; (ii) the resale -3- 12 occurring not less than two years after the party has purchased, and made full payment for, within the meaning of Rule 144, the securities to be sold; and, in the case of an affiliate, or of a non-affiliate who has held the securities less than three (3) years the sale being made through a broker in an unsolicited "broker's transaction" or in transactions directly with a market maker (as said term is defined under the Securities Exchange Act of 1934) and the amount of securities being sold during any three-month period not exceeding the specified limitations stated therein, if applicable. (e) The Purchaser further understands that at the time it wishes to sell the Securities there may be no public market upon which to make such a sale, and that, even if such a public market then exists, the Company may not be satisfying the current public information requirements of Rule 144, and that, in such event, it would be precluded from selling the Securities under Rule 144 even if the two-year minimum holding period had been satisfied. It understands that the Company is under no obligation to it to make Rule 144 available. (f) The Purchaser further understands that in the event all of the applicable requirements of Rule 144 are not satisfied, registration under the Securities Act, compliance with Regulation A, or some other registration exemption will be required; and that, notwithstanding the fact that Rule 144 is not exclusive, the Staff of the Securities and Exchange Commission has expressed its opinion that persons proposing to sell private placement securities other than in a registered offering and otherwise than pursuant to Rule 144 will have a substantial burden of proof in establishing that an exemption from registration is available from such offers or sales, and that such persons and their respective brokers who participate in such transactions do so at their own risk. Mercy Hospital Medical Center By: ---------------------------- Name: -------------------------- Title: ------------------------- Date: ------------------------------ [Date of execution by Optionee] -4- EX-11 3 COMPUTATION OF EARNINGS PER SHARE 1 APACHE MEDICAL SYSTEMS, INC. EXHIBIT 11 - COMPUTATION OF EARNINGS PER SHARE (in thousands, except per share data)
Three Months Ended March 31, 1997 1996 ------------ ------------ Income applicable to common shares: Net loss $(3,282) $(951) Increase in earnings resulting from conversion of convertible debt (1) - 78 ------- ------- Loss applicable to common shares $(3,282) $(873) ======= ======= Weighted average number of common shares outstanding 6,871 1,076 Conversion of preferred shares and convertible debt (2) - 3,478 Cheap stock options and warrants (2) - 74 ------- ------- Weighted average common shares 6,871 4,628 ======= ======= Loss per common share $(0.48) $(0.19) ======= =======
(1) Assumes the conversion took place January 1, 1996. (2) Pursuant with the Securities and Exchange Commission Staff Accounting Bulletin No. 83, all common and common equivalent shares issued during the twelve-month period prior to the filing of the initial public offering, even when antidilutive, have been included in the calculation as if they were outstanding for all periods, using the treasury stock method and the expected initital public offering price of $12.00 per share. EX-27 4 FINANCIAL DATA SCHEDULE
5 1,000 3-MOS DEC-31-1997 JAN-01-1997 MAR-31-1997 16,385 993 3,323 (234) 0 21,210 2,930 (1,643) 24,235 5,115 186 0 0 69 18,715 24,235 2,400 2,400 0 1,307 4,602 0 7 (3,282) 0 (3,282) 0 0 0 (3,282) (0.48) (0.48)
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