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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2004
[ ] 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 1-10418
UNITED MEDICORP, INC.
(Exact Name of Registrant as Specified in its Charter)
DELAWARE 75-2217002
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
200 N. Cuyler Street
Pampa, Texas 79065
(Address of principal executive offices) (Zip Code)
Registrant's Telephone Number, Including Area Code: (806) 669-9223
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 such 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
As of November 8, 2004, there were outstanding 30,713,550 shares of Common
Stock, $0.01 par value.
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UNITED MEDICORP, INC.
FORM 10-Q
For the quarterly period ended September 30, 2004
TABLE OF CONTENTS
Page
----
PART I - FINANCIAL INFORMATION
ITEM 1. Financial Statements
Condensed Consolidated Balance Sheets at September 30, 2004
and December 31, 2003......................................... 1
Condensed Consolidated Statements of Operations for the Three
and Nine Months Ended September 30, 2004 and 2003............. 2
Condensed Consolidated Statements of Cash Flows for the Nine
Months Ended September 30, 2004 and 2003...................... 3
Notes to the Condensed Consolidated Financial Statements........... 4
ITEM 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations................. 6
ITEM 3. Quantitative and Qualitative Disclosures
About Market Risk............................................. 17
ITEM 4. Controls and Procedures............................................ 17
PART II - OTHER INFORMATION
ITEM 1. Legal Proceedings.................................................. 18
ITEM 2. Changes in Securities.............................................. 18
ITEM 3. Defaults Upon Senior Securities.................................... 18
ITEM 4. Submission of Matters to a Vote of Security Holders................ 18
ITEM 5. Other Information.................................................. 18
ITEM 6. Exhibits and Reports on Form 8-K................................... 18
Signatures ............................................................... 19
UNITED MEDICORP, INC. AND SUBSIDIARY
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
September 30, December 31,
2004 2003
------------- -------------
ASSETS
Current assets:
Cash and cash equivalents ................................... $ 146,789 $ 62,851
Restricted cash ............................................. 119,818 60,365
Accounts receivable, net of allowance for doubtful accounts
Of $47,661 and $504 respectively ......................... 806,556 707,301
Factor reserve .............................................. 1,669 1,313
Prepaid expenses and other current assets ................... 23,315 31,106
------------- -------------
Total current assets .............................................. 1,098,147 862,936
Other non-current assets .......................................... 19,123 18,773
Property and equipment, net of accumulated depreciation of $858,218
and $817,554 respectively ................................... 346,847 381,354
Developed and purchased software net of accumulated amortization of
$235,581 and $205,661 respectively .......................... 78,879 92,527
Assets under capital leases, net of accumulated amortization of
$260,894 and $232,514, respectively ......................... 176,036 204,279
------------- -------------
Total assets ...................................................... 1,719,032 1,559,869
============= =============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current portion of capital lease obligations ................ 41,888 41,177
Current portion of notes payable ............................ 34,003 44,986
Trade accounts payable ...................................... 35,442 113,364
Payable to clients .......................................... 85,845 54,008
Accrued professional fees ................................... 22,561 19,662
Accrued payroll and benefits ................................ 219,419 209,461
Accrued expenses - Allied Health Options .................... 42,696 43,284
Accrued expenses other ...................................... 46,456 13,123
------------- -------------
Total current liabilities ......................................... 528,310 539,065
Long term capital lease obligations ............................... 115,862 146,535
Long term notes payable, excluding current portion ................ 42,765 165,996
Deferred revenue - Pampa Economic Development Corporation ......... 120,000 120,000
------------- -------------
Total liabilities ................................................. 806,937 971,596
------------- -------------
Stockholders' equity:
Common stock; $0.01 par value; 50,000,000 shares authorized;
31,019,097 and 29,519,097 shares issued, respectively .... 310,191 295,191
10% Cumulative convertible preferred stock; $0.01 par value;
5,000,000 shares authorized; none issued ................. -- --
Less treasury stock at cost, 350,547 and 305,547 shares
respectively ................................................ (223,456) (221,881)
Additional paid-in capital .................................. 18,800,771 18,815,771
Retained deficit ............................................ (17,975,411) (18,300,808)
------------- -------------
Total stockholders' equity ........................................ 912,095 588,273
------------- -------------
Total liabilities and stockholders' equity ........................ $ 1,719,032 $ 1,559,869
============= =============
The accompanying notes are an integral part of these condensed consolidated
financial statements
1
UNITED MEDICORP, INC. AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
------------------------- -------------------------
2004 2003 2004 2003
----------- ----------- ----------- -----------
Revenues:
Billing and collection services .... $ 843,220 $ 961,751 $ 3,029,776 $ 2,592,300
Coding services .................... 64,514 41,636 173,449 134,104
Other revenues ..................... 44,722 43,650 85,692 74,275
----------- ----------- ----------- -----------
Total revenues .................. 952,456 1,047,037 3,288,917 2,800,679
Expenses:
Wages and benefits ................. 608,563 679,644 2,057,715 1,877,827
Selling, general and administrative 206,683 187,724 643,185 513,524
Depreciation and amortization ...... 41,432 29,506 124,407 71,132
Office, vehicle and equipment rental 4,718 4,087 13,056 14,417
Professional fees .................. 16,622 27,906 54,130 73,270
Interest, net ...................... 6,119 5,576 23,783 13,556
Provision for doubtful accounts .... 47,244 -- 47,244 --
----------- ----------- ----------- -----------
Total expenses ..................... 931,381 934,443 2,963,520 2,563,726
----------- ----------- ----------- -----------
Net income ............................... $ 21,075 $ 112,594 $ 325,397 $ 236,953
=========== =========== =========== ===========
Basic earnings per common share:
Net income ......................... $ 0.0007 $ 0.0039 $ 0.0109 $ 0.0081
=========== =========== =========== ===========
Weighted average shares outstanding ...... 30,713,550 29,213,550 29,963,550 29,211,884
Diluted earnings per common share:
Net income ......................... $ 0.0007 $ 0.0036 $ 0.0104 $ 0.0076
=========== =========== =========== ===========
Weighted average shares outstanding ...... 31,301,144 31,203,752 31,346,168 31,307,531
The accompanying notes are an integral part of these condensed consolidated
financial statements
2
UNITED MEDICORP, INC. AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Nine Months Ended
September 30,
2004 2003
--------- ---------
Cash flows from operating activities:
Net income ................................................... $ 325,397 $ 236,953
Adjustments to reconcile net income to net cash provided by
operating activities:
Amortization of assets under capital leases .......... 28,778 9,193
Depreciation of fixed assets ......................... 95,629 61,939
Provision for doubtful accounts ...................... 47,244 (88)
Loss on disposal of assets ........................... 553 --
Changes in assets and liabilities:
Restricted cash ...................................... (59,453) (40,414)
Accounts receivable, gross ........................... (146,499) (158,410)
Factor reserve ....................................... (356) (133,826)
Prepaid expenses and other assets .................... 7,441 (23,405)
Accounts payable ..................................... (77,922) 44,343
Payable to clients ................................... 31,837 34,895
Accrued liabilities .................................. 45,601 31,647
--------- ---------
Net cash provided by operating activities .......................... 298,250 62,827
--------- ---------
Cash flows from investing activities:
Purchase of automobiles, furniture, equipment and improvements (37,375) (120,464)
Capitalized software development ............................. (11,300) (41,735)
Proceeds from sale of auto and equipment ..................... 114 1,500
--------- ---------
Net cash used in investing activities .............................. (48,561) (160,699)
--------- ---------
Cash flows from financing activities:
Repayment of capital lease obligations ....................... (29,962) (27,705)
Repayment of notes payable ................................... (38,214) (28,836)
Proceeds from exercise or stock options ...................... -- 50
Purchase of treasury stock ................................... (1,575) --
Net proceeds from unsecured lines of credit .................. (96,000) 100,000
Proceeds from auto loan ...................................... -- 37,725
--------- ---------
Net cash provided by (used in) financing activities ............... (165,751) 81,234
--------- ---------
Increase (decrease) in cash and cash equivalents ................... 83,938 (16,638)
Cash and cash equivalents at beginning of period ................... 62,851 51,760
--------- ---------
Cash and cash equivalents at end of period ......................... $ 146,789 $ 35,122
========= =========
Supplemental disclosures:
Cash paid for interest ............................................. $ 23,783 $ 13,556
Non cash investing and financing activities:
Additions to Capital Lease Obligations ............................. $ -- $ 187,817
The accompanying notes are an integral part of these condensed consolidated
financial statements
3
UNITED MEDICORP, INC. AND SUBSIDIARY
Management's Discussion and Analysis Of
Financial Condition and Results of Operations (Continued)
Note 1. Basis of Presentation
The accompanying unaudited consolidated financial statements of United
Medicorp, Inc. ("UMC" or the "Company" or the "registrant") include its
wholly owned subsidiary, United Moneycorp. Inc. ("UMY"). All material
intercompany transactions and balances have been eliminated. Certain prior
year balances have been reclassified to conform with current year
presentation. The financial information presented should be read in
conjunction with the audited financial statements of the Company for the
year ended December 31, 2003 included in the Company's Form 10-K.
The unaudited consolidated financial information has been prepared in
accordance with the Company's customary accounting policies and practices.
In the opinion of management, all adjustments, consisting of normal
recurring adjustments necessary for a fair presentation of results for the
interim period, have been included.
The preparation of financial statements in conformity with accounting
principles generally accepted in the United States of America requires
management to make estimates and assumptions that affect the reported
amounts of assets, liabilities, revenues and expenses. The results for
interim periods are not necessarily indicative of results to be expected for
the year.
ACCOUNTS RECEIVABLE CONCENTRATION
The following table shows the concentration of total accounts receivable at
September 30, 2004 and December 31, 2003. There was a significant change in the
concentration of the Company's accounts receivable due to the cancellation of a
significant contract as of March 31, 2004 and the addition of two new
significant contracts in March and May of 2004.
09/30/04 12/31/03
---------- ----------
Customer A................................ 4% 63%
Customer B................................ 2 3
Customer C................................ 15 --
Customer D................................ 63 --
Other customers........................... 16 34
---------- ----------
100% 100%
========== ==========
As of the date of this filing the Company has reserved $47,244 of the
outstanding accounts receivable from Customer C, which represents 38% of
the outstanding receivable balance from Customer C as of September 30,
2004. During the third quarter of 2004, the Company received payments on
several invoices from this customer that were under paid by approximately
25%. On October 30, 2004 the Company received a letter from Customer C
alleging that UMC had failed in its contractual obligations in regards to
the accounts receivable management services provided to the Customer. It
is management's opinion that the customer's allegations have no merit, and
are simply an attempt to persuade UMC to discount its invoices due from
the customer. UMC management believes that it will eventually collect all
monies due from the customer, but that it may have to incur the cost of
litigation in order to achieve this. The amount of reserve set up for this
receivable represents the balances left on short paid invoices to date,
plus 25% of the remaining outstanding invoices as of September 30, 2004.
Management will continue to vigorously pursue the collection of this
receivable. If the Company is required to pursue collection through
litigation, there can be no assurance that it will be successful or, if
successful, the cost to the Company in terms of legal and management time
devoted to the effort. In the event that the Company is not successful,
there could be additional bad debt write offs of up to $9,581 which
represents the remaining unreserved balance at September 30, 2004 which
was not paid as of the date of this filing, and additional revenue billed
during the month of October 2004 of $14,665.
4
UNITED MEDICORP, INC. AND SUBSIDIARY
Management's Discussion and Analysis Of
Financial Condition and Results of Operations (Continued)
SOFTWARE DEVELOPMENT COSTS
The cost of software that is developed or purchased for internal use, is
accounted for pursuant to AICPA Statement of Position 98-1, "Accounting for the
Costs of Computer Software Developed or Obtained for Internal Use" ("SOP 98-1").
Pursuant to SOP 98-1, the Company capitalizes costs incurred during the
application development stage of software developed for internal use, and
expenses costs incurred during the preliminary project and the
post-implementation operation stages of development. During the first nine
months of 2004, the Company capitalized $11,300 in costs incurred for new
internal software development that was in the application development stage.
FACTOR RESERVE
The Factor Reserve account includes 20% of outstanding invoices purchased
by the factoring company (required reserve) and the excess above this 20%, which
is available to be drawn by UMC as cash upon demand (available reserve). At
September 30, 2004 and December 31, 2003, UMC had no factored invoices
outstanding, therefore the balance in the factor reserve account represents cash
reserves on deposit at the factoring company. The factoring company pays
interest at the rate of prime minus two percent on excess funds that remain on
deposit with the factoring company. The balances of the available reserves
included in the Factor Reserve as of September 30, 2004 and December 31, 2003
were as follows
September 30, December 31,
2004 2003
------------- -------------
Required Reserve ........................... $ -- $ --
Available Reserve .......................... 1,669 1,313
------------- -------------
Factor Reserve at end of period ............ $ 1,669 $ 1,313
============= =============
5
UNITED MEDICORP, INC. AND SUBSIDIARY
Management's Discussion and Analysis Of
Financial Condition and Results of Operations (Continued)
SFAS NO. 148 ACCOUNTING FOR STOCK-BASED COMPENSATION-
TRANSITION AND DISCLOSURE - PRO FORMA
Pro forma net income and earnings per share presented below reflect the
results of the Company for the first nine months of the respective years as if
the fair value based accounting method described in SFAS No. 148 had been used
to account for stock and warrant-based compensation costs, net of taxes and
forfeitures of prior year grants:
Nine Months Ended September 30
-------------------------------
2004 2003
------------- -------------
Pro forma impact of fair value method (FAS 148)
Net income .......................................... $ 325,397 $ 236,953
SFAS No. 148 employee compensation cost ............. (4,338) (5,695)
------------- -------------
Pro forma net income ................................ 321,059 231,258
Earnings per common share
Basic as reported ................................... $ .0109 $ .0081
Diluted as reported ................................. .0104 .0076
Basic - pro forma ................................... .0107 .0079
Diluted - pro forma ................................. $ .0102 $ .0074
Weighted average Black-Scholes fair value assumptions
Risk free interest rate ............................. 2.5% 2.5%
Expected life ....................................... 10 years 10 years
Expected volatility ................................. 220% 228%
Expected dividend yield................................. -- --
ITEM 2 - Management's Discussion and Analysis Of Financial Condition and Results
of Operations
GENERAL CONSIDERATIONS
Except for the historical information contained herein, the matters
discussed may include forward-looking statements relating to such matters as
anticipated financial performance, legal issues, business prospects,
technological developments, new products, research and development activities
and similar matters. The Private Securities Litigation Reform Act of 1995
provides a safe harbor for forward-looking statements. In order to comply with
the terms of the safe harbor, the Company notes that forward-looking statements
include the intent, belief, or current expectations of the Company and members
of its senior management team, as well as the assumptions on which such
statements are based. Prospective investors are cautioned that any such
forward-looking statements are not guarantees of future performance and involve
risks and uncertainties, and that actual results may differ materially from
those contemplated by such forward-looking statements. Important factors
currently known to management that could cause actual results to differ
materially from those in forward-looking statements are set forth in the safe
harbor compliance statement for forward-looking statements included as Exhibit
99.1 to this Form 10-Q and are hereby incorporated herein by reference. The
Company undertakes no obligation to update or revise forward-looking statements
to reflect changed assumptions, the occurrence of unanticipated events or
changes to future operating results over time.
6
UNITED MEDICORP, INC. AND SUBSIDIARY
Management's Discussion and Analysis Of
Financial Condition and Results of Operations (Continued)
UMC and UMY derive their primary revenues from claims management services
and accounts receivable management services. A substantial portion of UMC and
UMY revenues are derived from recurring monthly charges to their customers under
service contracts that typically are cancelable with a 30 to 60 day notice.
The following table sets forth for each period indicated the volume and
gross dollar amount of insurance claims received and fees recognized for each of
the Company's two principal accounts receivable management services.
CLAIMS MANAGEMENT SERVICES - PROCESSING VOLUMES
2004 2003 2002 2001
------------------------- ---------------------------------- ---------------------------------- -------
Quarter Quarter Quarter Quarter
------------------------- ---------------------------------- ---------------------------------- -------
Third Second First Fourth Third Second First Fourth Third Second First Fourth
------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- -------
UMC
- ----------------
Number of Claims
Accepted for
Processing:
Ongoing 21,772 26,250 36,869 36,740 42,001 31,282 30,549 32,602 43,522 37,952 34,012 21,818
Backlog -- 1,588 -- -- -- -- -- -- -- -- -- --
------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- -------
Total 21,772 27,838 36,869 36,740 42,001 31,282 30,549 32,602 43,522 37,952 34,012 21,818
Gross $ Amount
of Claims
Accepted for
Processing
(000's):
Ongoing 56,806 84,830 34,232 40,723 36,662 24,272 23,033 26,717 30,772 22,085 23,336 14,221
Backlog 6 4,733 -- -- -- -- -- -- -- -- -- --
------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- -------
Total 56,812 89,563 34,232 40,723 36,662 24,272 23,033 26,717 30,772 22,085 23,336 14,221
Collections $
(000's)
Ongoing 18,806 20,635 8,780 7,897 6,923 6,098 5,010 6,126 6,091 4,837 4,710 4,470
Backlog 330 4 -- -- -- -- -- -- -- -- 6 11
------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- -------
Total 19,136 20,639 8,780 7,897 6,923 6,098 5,010 6,126 6,091 4,837 4,716 4,481
Fees Earned $
(000's)
Ongoing 586 830 560 522 500 448 460 460 471 408 416 301
Backlog 9 -- -- -- -- -- -- -- -- -- 1 2
------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- -------
Total 595 830 560 522 500 448 460 460 471 408 417 303
Average Fee %
Ongoing 3.1% 4.0% 6.4% 6.6% 7.2% 7.3% 8.6% 7.5% 7.7% 8.4% 8.8% 6.7%
Backlog 2.7% -- -- -- -- -- -- -- -- -- 16.6% 18.2%
For Ongoing claims, there is typically a time lag of approximately 5 to 90
days from contract execution to complete development of system interfaces and
definition of procedural responsibilities with customer personnel. During this
period, Company personnel survey the customer's existing operations and prepare
for installation. Once the customer begins transmitting claims to the Company,
there is usually a time lag of 30 to 90 days between transmission of claims to
third party payers and collection of those claims from payers.
The following table sets forth for each period indicated the volume and
gross dollar amount of customer service and collection accounts received and
fees recognized for UMY.
7
UNITED MEDICORP, INC. AND SUBSIDIARY
Management's Discussion and Analysis Of
Financial Condition and Results of Operations (Continued)
ACCOUNTS RECEIVABLE MANAGEMENT SERVICES - PROCESSING VOLUME
2004 2003 2002 2001
------------------------- ---------------------------------- ---------------------------------- -------
Quarter Quarter Quarter Quarter
------------------------- ---------------------------------- ---------------------------------- -------
Third Second First Fourth Third Second First Fourth Third Second First Fourth
------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- -------
UMY
- -----------------
Number of
Accounts Accepted
for Collection:
Early out 34,364 43,803 37,828 37,336 34,601 24,330 11,266 13,859 17,818 17,467 26,963 27,413
Bad debt 24,677 22,268 21,728 38,092 27,390 15,448 15,322 26,281 16,430 14,598 19,856 25,811
------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- -------
Total 59,041 66,071 59,556 75,428 61,991 39,778 26,588 40,140 34,248 32,065 46,819 53,224
Gross $ Amount
of Accounts
Accepted for
Collection
(000's)
Early out 36,683 50,768 38,110 32,808 30,561 17,897 10,815 12,021 13,424 14,120 22,647 20,724
Bad debt 10,242 3,598 14,067 24,693 16,993 12,379 12,547 15,934 9,714 10,358 12,880 17,035
------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- -------
Total 46,925 54,366 52,177 57,501 47,554 30,276 23,362 27,955 23,138 24,478 35,527 37,759
Collections $
(000's)
Early out 2,363 2,456 2,679 2,535 1,862 1,105 949 1,220 1,563 2,007 2,449 2,433
Bad debt 288 618 1,140 1,301 1,283 1,074 1,155 909 939 892 740 422
------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- -------
Total 2,651 3,074 3,819 3,836 3,145 2,179 2,104 2,129 2,502 2,899 3,189 2,855
Fees Earned $
(000's)
Early out 186 191 222 202 182 132 113 131 157 187 227 215
Bad debt 66 143 241 279 279 226 252 203 208 186 152 94
------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- -------
Total 252 334 463 481 461 358 365 334 365 373 379 309
Average Fee %
Early out 7.9% 7.9% 8.3% 8.0% 9.7% 11.9% 11.9% 10.7% 10.0% 9.3% 9.3% 8.8%
Bad debt 22.9% 23.5% 21.3% 21.4% 21.7% 21.0% 22.1% 22.3% 22.1% 20.8% 20.4% 22.2%
For placements of collection accounts, there is typically a time lag of
approximately 15 to 45 days from contract execution to electronic transfer of
accounts from the customer. In many cases, collection accounts are transferred
to UMY via hard copy media, which requires UMY employees to manually enter
collection account data into the UMY system. Collection fee percentages charged
to the customer vary depending on the service provided, the age and average
balance of accounts.
8
UNITED MEDICORP, INC. AND SUBSIDIARY
Management's Discussion and Analysis Of
Financial Condition and Results of Operations (Continued)
LOSS OF SIGNIFICANT CUSTOMERS
On October 22, 2003 UMC announced the resignation of its key contact at
Presbyterian Healthcare Services of New Mexico ("PHS"). On February 20, 2004 UMC
announced that it had been informed by new management at PHS that most of the
business outsourced to UMC would be re-bid, and that the remaining business
would be brought back in house in mid 2004. On March 15, 2004 PHS informed UMC
that it was not selected as one of the vendors to provide ongoing services for
PHS. PHS management stated that the reason UMC was not selected was because
other vendors had submitted proposals with fee percentages lower than those
proposed by UMC. UMC continued to receive placements of accounts from PHS
through March 31, 2004, and revenues ramped down rapidly through the second and
third quarters. This contract provided revenues of $821,799, $2,434,000,
$2,246,000 and $1,744,000, which represented 25%, 62%, 65%, and 63% of total
revenue for the first nine months of 2004 and for the years 2003, 2002, and 2001
respectively.
On May 4, 2004, the Company received notification from management of
Hamilton Hospital ("Hamilton") that they would be canceling their contract with
UMC for day one claims management services effective June 24, 2004, which is the
end of the initial one-year contract term. Hamilton management praised the work
that UMC has done for them during the term of the contract, but cited cost
considerations as the reason for termination. This contract generated revenue of
$166,372 and $118,000 during the first nine months of 2004 and for the year 2003
which represented 5% and 3% of each period's gross revenue respectively.
On March 11, 2004, the Company executed a day one claims management
agreement with Lubbock Heart Hospital ("LHH"). This contract had an original
term of three months and new placements to UMC were discontinued on June 11,
2004. This contract generated revenue of $432,000 during the first nine months
of 2004, which represents 13% of gross revenue for the nine-month period.
Management expects minimal revenue from this contract during the fourth quarter
of 2004.
MANAGEMENT'S PLAN WITH RESPECT TO LOST REVENUES
During the past several years, management has taken steps to lessen the
Company's concentration risk associated with its large customers. These steps
include, but are not limited to:
o In April 2002, the Company started up UMC's Coding Services Division. This
division generated revenue of $173,000 and $183,000 during the first nine
months of 2004 and for the year 2003 respectively.
o In March 2003, the Company began development of its Electronic Medical
Records Storage service. The beta test of this product was completed in
September 2003, and the Company began offering this service to its customers
shortly thereafter.
o From 2000 to 2004 the annual budget for UMC's sales and marketing department
has increased from $0 to $299,000. In 2003 the Company's actual expenses for
sales and marketing were $233,000 compared to $117,000 in 2002 and $15,000
in 2001.
o From June 24, 2003 through October 31, 2004, the Company has executed the
following new contracts:
o On October 29, 2004 the Company executed a contract for early stage
patient balance collections with a hospital in Central Texas.
o On October 6, 2004 the Company executed a coding services contract with
a hospital in East Texas.
o On October 1, 2004 the Company executed a contract for bad debt
collections with a hospital in West Texas.
9
UNITED MEDICORP, INC. AND SUBSIDIARY
Management's Discussion and Analysis Of
Financial Condition and Results of Operations (Continued)
o On August 26, 2004 the Company executed a contract for bad debt
collections with a hospital in Central Texas.
o On August 24, 2004 the Company executed a contract for early stage and
bad debt collections with a hospital in West Texas.
o On July 8, 2004 the Company executed a contract for bad debt collections
with a hospital in East Texas.
o On July 1, 2004 the Company executed a contract for bad debt collections
with a hospital in East Texas.
o On May 7, 2004 the Company executed a contract for day one medical
claims billing and follow up service, early stage patient balance
collection service, and bad debt patient balance collection service with
a hospital located in East Texas. This contract supercedes a contract
that was previously executed on February 23, 2004 for early stage and
bad debt patient balance collection services.
o On May 1, 2004 the Company executed a contract for bad debt second
collections with a hospital in South Texas.
o A collection services contract for early stage and bad debt patient
balance accounts was executed on April 9, 2004, with a hospital in South
Texas.
o An offsite electronic medical records storage contract with a hospital
in Central Texas was executed on March 17, 2004.
o A medical claims management contract for day one billing and follow up
was executed on March 12, 2004, with a hospital located in West Texas.
The term of this contract was only three months, and new placements to
UMC were discontinued on June 11, 2004.
o A collection services contract for early stage and bad debt patient
balance accounts was executed on February 23, 2004, with a hospital in
East Texas.
o A coding services contract with a hospital in West Texas was executed on
February 16, 2004.
o A medical claims management contract for day one billing and follow up
was executed on January 22, 2004, with a hospital located in West Texas.
o A collection services contract for early stage patient balance accounts
was executed on December 18, 2003 with a hospital in South Texas.
o An offsite electronic medical records storage contract with a hospital
in West Texas was executed on December 18, 2003.
o A coding services contract with a hospital in Central Texas was executed
on December 12, 2003.
o A collection services contract for bad debt patient balance accounts was
executed on December 10, 2003 with a hospital in South Texas.
o A coding services contract with two hospitals in Central Texas was
executed on November 28, 2003.
o A collection services contract for early stage patient balance accounts
was executed on November 20, 2003 with a hospital in West Texas.
o A coding services contract for overflow coding was executed with a
hospital in East Texas was executed on November 5, 2003
o A collection services contract for bad debt patient balance accounts was
executed on September 15, 2003 with a hospital in West Texas.
o A medical claims management contract for claims follow up and patient
balance collections was executed on August 28, 2003 with a hospital
located in West Texas.
o A collection services contract for early stage patient balance accounts
was executed on August 6, 2003 with a hospital in West Texas.
o A medical claims management contract for day one billing and follow up
was executed on June 24, 2003, with a hospital located in Central Texas.
UMC management has received notice of this customer's intention to
cancel this contract at June 24, 2004 (the end of the initial contract
term), due to cost considerations.
10
UNITED MEDICORP, INC. AND SUBSIDIARY
Management's Discussion and Analysis Of
Financial Condition and Results of Operations (Continued)
Management continues to vigorously pursue new business while rigorously
managing expenses without negatively impacting service levels. However, there
can be no assurance that UMC will be successful in obtaining enough new business
to replace the lost business from PHS.
REVENUE AND EARNINGS GUIDANCE FOR 2004
As of the date of this report, management's projection of annualized
revenues from the ongoing contracts listed above falls within a range between
54% and 82 % of the 2003 total revenues from PHS. With the remaining revenue to
be received during 2004 from PHS during the ramp down phase, the new contracts
described above along with other existing customers are projected to place the
Company's 2004 revenues between 100% and 105% of 2003 revenues. In addition,
management believes it will acquire additional new contracts during the
remainder of 2004 and in 2005 that will make up most if not the entire amount of
revenue lost from PHS. Due to uncertainties regarding the profitability of new
customer contracts, UMC management is not able to provide guidance with regard
to net income. Net income as a percentage of revenue may deviate from historical
norms. If management is unable to successfully develop and implement new
profitable customer contracts and new service lines, payroll expense will be
scaled down to the level required to service existing contracts, without
sacrificing quality of service. If this adjustment in headcount is not
sufficient to bring expenses in line with revenue and future cash requirements,
management will be required to adopt other alternative strategies, which may
include but are not limited to, actions such as further reducing management and
line employee headcount and compensation, restructuring existing financial
obligations, seeking a strategic merger or acquisition, seeking the sale of the
Company or the Company's public shell, and/or seeking additional debt or equity
capital. There can be no assurance that any of these strategies could be
effected on satisfactory terms. RESULTS OF OPERATIONS
The following table sets forth certain items from the Company's Consolidated
Statements of Operations expressed as a percentage of revenues:
Three Months Ended Nine Months Ended
September 30, September 30,
------------------ ------------------
2004 2003 2004 2003
-------- -------- -------- --------
Revenue 100% 100% 100% 100%
-------- -------- -------- --------
Wages and benefits............................... 64 65 63 67
Selling, general and administrative.............. 22 18 20 18
Depreciation and amortization.................... 4 3 3 2
Office, vehicle and equipment rental............. -- -- -- 1
Professional fees................................ 2 3 2 3
Interest, net, and other (income) expense........ 1 -- 1 1
Provision for doubtful accounts.................. 5 -- 1 --
-------- -------- -------- --------
Total expenses................................... 98 89 90 92
-------- -------- -------- --------
Net income ...................................... 2% 11% 10% 8%
======== ======== ======== ========
11
UNITED MEDICORP, INC. AND SUBSIDIARY
Management's Discussion and Analysis Of
Financial Condition and Results of Operations (Continued)
Comparison of the Quarter Ended September 30, 2004 to the Quarter Ended
September 30, 2003
Revenues decreased $95,000, or 9% primarily due to the following:
o Ongoing Accounts Receivable Management Services revenue of $595,000 in the
current quarter increased by $95,000 compared to the same quarter in 2003 as
a result of multiple changes to the Company's claims inventory mix. The
increase was due primarily to revenues from five contracts that were signed
or implemented after the third quarter of 2003. These contracts provided
combined revenue of $408,000 during the third quarter of 2004. The Company
also received increased revenue from a contract that was signed October 31,
2000. This contract provided revenue of $164,000 and $132,000 during the
third quarter of 2004 and 2003 respectively. These increases in revenue were
partially offset by decreased revenue from the PHS contract that was
cancelled effective March 31, 2004. This contract provided ongoing accounts
receivable management service revenue of $5,000 and $283,000 during the
third quarter of 2004 and 2003 respectively. The Company also had decreased
revenue from two other contracts that were implemented prior to the third
quarter of 2003 and were cancelled prior to the third quarter of 2004. These
contracts provided combined revenue of $18,000 and $85,000 during the third
quarter of 2004 and 2003 respectively.
Of the $408,000 received during the third quarter of 2004 from new
contracts, $101,000 was from a contract for which the term was completed
prior to the third quarter of 2004. An additional $32,000 was from contracts
that were canceled either prior to or after the third quarter of 2004.
Management expects revenue from these contracts to ramp down rapidly during
the fourth quarter of 2004.
o Collection Agency Services revenue of $248,000 in the current quarter
decreased by $213,000 as compared to the same quarter of 2003, due primarily
to decreased revenues from the PHS contract and the contract of a subsidiary
company that were both cancelled effective March 31, 2004. Total revenues
from these contracts were $29,000 during the third quarter of 2004, compared
to total revenues of $399,000 during the third quarter of 2003. This loss in
revenue was partially offset by revenue from several new contracts signed
after the third quarter of 2003. Revenue from these contracts was $103,000
during the third quarter of 2004. The Company also had increased revenue
from a contract that was signed April 18, 2003 and from a contract that was
signed August 28, 2003. These contracts provided combined revenue of $76,000
and $28,000 during the third quarter of 2004 and 2003 respectively. Revenue
from all other customers was $40,000 during the third quarter of 2004,
compared to $34,000 during the third quarter of 2003.
o Coding Services revenue of $65,000 in the current quarter increased by
$23,000 as compared to the third quarter of 2003. The increase in revenue
was due primarily to coding consulting fees of $25,000 in the current
quarter. Revenue from other coding services decreased by $2,000 compared to
the prior year quarter.
During the third quarter of 2002, the Company began offering off-site coding
services through its proprietary coding web site. The table below displays
the number of claims accepted and coded through the web site by quarter.
12
UNITED MEDICORP, INC. AND SUBSIDIARY
Management's Discussion and Analysis Of
Financial Condition and Results of Operations (Continued)
OFF-SITE CODING SERVICES - PROCESSING VOLUME
2004 2003 2002
------------------------- ---------------------------------- ----------------
Quarter Quarter Quarter
------------------------- ---------------------------------- ----------------
Third Second First Fourth Third Second First Fourth Third
------- ------- ------- ------- ------- ------- ------- ------- -------
- ----------------
Number of Claims
accepted
for Coding:
Inpatient 604 602 832 303 177 213 161 140 9
Outpatient 1,657 780 699 1,007 734 761 553 201 --
------- ------- ------- ------- ------- ------- ------- ------- -------
Total 2,261 1,382 1,531 1,310 911 974 714 341 9
o Other revenue increased by $1,000 compared to the same quarter of 2003 due
to $1,400 in consulting fees during the current year quarter. The Company
did not recognize any consulting fee income during the third quarter of
2003.
Wages and benefits expense decreased $71,000 or 10% as a result of multiple
factors. Wage and salary expense decreased by $31,000 as a result of decreased
head count. At September 30, 2004, the Company had 69 full time and 11 part time
employees, compared to 99 full time and 14 part time employees at September 30,
2003. Head count was decreased as a result of a decrease in business placements
during the third quarter of 2004. Payroll tax and benefits expenses decreased by
a combined $7,000 during the third quarter of 2004 as compared to the same
quarter 2003, also as a result of the decrease in headcount. Bonus expense
during the third quarter of 2004 decreased by $33,000 as compared to the same
quarter of 2003 as a result of lower bonuses being earned by operations
personnel, and a lower annual bonus accrual due to decreased gross revenue and
net income in the current quarter.
Selling, general and administrative expense increased $19,000 or 10% due to
several factors. Software maintenance expense increased $17,000 due to an
increase in demand for system changes as a result of new customer startups and
associated customization required to accommodate acceptance of new customer
claims and report files; sales commission expense increase by $12,000 due to the
addition of several new customers; taxes and insurance expense increased by
$8,000 due to accruals for state franchise tax; employee training expense
increased $6,000 due primarily to a $5,000 credit for employee training received
during the third quarter of 2003; Theses increases were partially offset by
decreases in telephone expense $5,000, postage $7,000, and travel and
entertainment $7,000 as a result of decreased business placement during the
current quarter. Factor fees decreased by $3,000 due to the Company not
factoring invoices in the current quarter, and all other sg&a expenses decreased
by a combined $2,000 in the current year quarter.
Depreciation and amortization expense increased $12,000 or 40% as a result
of the addition of approximately $404,000 in leased and purchased fixed assets
during 2003, and additions of approximately $49,000 during the first nine months
of 2004.
Office, vehicle and equipment rental expense decreased $600 or 15% as
compared to the third quarter of 2003 due to a decrease in equipment lease
expense.
Professional fees decreased $11,000 or 40% due to primarily to legal fees of
$10,000 incurred during the third quarter of 2003. The Company did not incur any
legal fees during the third quarter of 2004.
Interest expense increased $500 or 10% in the current quarter.
Provision for doubtful accounts increased by $47,000 as a result of
receivables reserved during the third quarter of 2004. There were no receivables
reserved during the third quarter of 2003.
13
UNITED MEDICORP, INC. AND SUBSIDIARY
Management's Discussion and Analysis Of
Financial Condition and Results of Operations (Continued)
Comparison of the Nine Months Ended September 30, 2004 to the Nine Months Ended
September 30, 2003
Revenues increased $488,000 or 17% primarily due to the following:
o Ongoing Accounts Receivable Management Services revenue of $1,976,000 in the
current nine-month period increased by $568,000 compared to the same period
in 2003 as a result of multiple changes to the Company's claims inventory
mix. The increase was due primarily to revenue from five ongoing accounts
receivable management services contracts that were executed during or after
the third quarter of 2003. These contracts provided revenue of $977,000
during the nine month period ended September 30, 2004. The Company also
received $114,000 in increased revenue from an ongoing accounts receivable
management contract that was signed in June 2003 and concluded in June 2004,
and $54,000 in increased revenue form a contract that was signed October 31,
2000. This revenue increase was partially offset by reduced revenue from the
PHS contract that was signed March 22, 2000 and was cancelled along with a
contract of a subsidiary company effective March 31, 2004. These contracts
provided revenues of $389,000 and $928,000 during the first nine months of
2004 and 2003 respectively.
Of the $977,000 received during the first nine months of 2004 from new
contracts, $432,000 was from a contract for which the term was completed in
June of 2004, and $72,000 was from a contract for which the ongoing accounts
receivable management portion was discontinued in May of 2004.
o Collection Agency Services revenue of $1,045,000 in the current nine-month
period decreased by $139,000 compared to the same period of 2003, primarily
due to decreased revenue from the PHS contract which was cancelled along
with the contract of a subsidiary company effective March 31, 2004. Revenue
from these contracts was $486,000 and $1,014,000 for the first nine months
of 2004 and 2003 respectively. This loss in revenue was partially offset by
revenue from several new contracts signed after the third quarter of 2003.
Revenue from these contracts was $221,000 during the first nine months of
2004. The Company also had increased revenue from a contract that was signed
April 18, 2003 and from a contract that was signed August 28, 2003. These
contracts provided combined revenue of $214,000 and $32,000 during the third
quarter of 2004 and 2003 respectively. Revenue from all other customers was
$123,000 during the first nine months of 2004, compared to $137,000 during
the first nine months of 2003.
o Coding Services revenue of $173,000 in the current nine-month period
increased by $39,000 as compared to the same period during 2003. The
increase in revenue was due to coding consulting fees of $41,000 recognized
during the first nine months of the 2004. The Company did not recognize any
revenue from coding consulting fees during the first nine months of 2003.
o Other revenue of $86,000 during the current nine-month period increased by
$12,000 compared to the same nine-month period of 2003. Other revenue during
the current nine-month period consisted of $77,000 in incentive income from
the PEDC, $4,000 in interest income, $4,000 in medical record storage fees
and $1,000 in consulting fees. During the first nine months of 2003, other
revenue consisted of $74,000 in incentive income from the PEDC.
Wages and benefits expense increased $180,000 or 10%. Salary and wage
expense increased by $122,000 due to the addition of a director of claims
operations in September 2003, an increase of approximately 3 full time employee
equivalents during the first nine months of 2004 as compared to the first nine
months of 2003, and merit pay increases that averaged approximately 3 percent.
Payroll tax expense increased by $6,000 as a result of the increase in payroll
cost, and employee benefit cost increased $44,000 during the first nine months
of 2004 as compared to the first nine months of 2003 due to having more
employees eligible for benefits. Bonus expense increased $8,000 during the
current nine-month period due to higher performance bonuses paid and higher
annual bonus accruals as a result of increased fees and profitability.
14
UNITED MEDICORP, INC. AND SUBSIDIARY
Management's Discussion and Analysis Of
Financial Condition and Results of Operations (Continued)
Selling, general and administrative expense increased $130,000 or 25 %
during the first nine months of 2004, as compared to the first nine months of
2003. Increases in commissions $36,000, software maintenance $28,000, employee
relocation $25,000, taxes and insurance $24,000, various other $13,000, postage
$10,000, employee training $9,000, contract labor $7,000, office supplies
$4,000, repairs and maintenance $3,000, and telephone $2000 expenses, were
partially offset by decreases in factor fees $17,000, advertising and marketing
$7,000, recruiting $4,000, and conventions and trade shows $3,000 expenses.
Depreciation and amortization expense increased $53,000 or 75% as a result
of the addition of approximately $404,000 in leased and purchased fixed assets
during 2003, and additions of approximately $49,000 during the first nine months
of 2004.
Office, vehicle and equipment rental expense decreased $1,400 or 9% during
the first nine months of 2004, as compared to the first nine months of 2003.
Professional fees decreased $19,000 or 26% due to primarily to legal fees of
$25,000 incurred during the first nine months of 2003 compared to legal fees of
$2,000 incurred during the first nine months of 2004. Other professional fees
increased by $4,000 during the current nine-month period.
Interest, net increased $10,000 or 75% during the first nine months of 2004,
as compared to the first nine months of 2003, primarily as a result of interest
incurred on a lease of new telephone equipment that was signed in September of
2003 - $8,000 and interest incurred on two unsecured lines of credit from which
no draws were made during the first nine months of 2003 - $5000. Interest on
other liabilities decreased by $3,000 due to declining principle balances, and
the elimination of factoring.
Provision for doubtful accounts increased by $47,000 as a result of
receivables reserved during the third quarter of 2004. There were no receivables
reserved during the first nine months of 2003.
15
UNITED MEDICORP, INC. AND SUBSIDIARY
Management's Discussion and Analysis Of
Financial Condition and Results of Operations (Continued)
Liquidity and Capital Resources
At September 30, 2004, the Company's liquid assets, consisting of cash,
totaled $146,789 plus unencumbered cash due from the factoring company of $1,669
compared to cash of $62,851 and unencumbered cash due from the factoring company
of $ 1,313 at December 31, 2003. The cash due from the factoring company is
available to be wired to UMC by the factoring company upon UMC's request.
Working capital was $570,000 at September 30, 2004 compared to working capital
of $324,000 at December 31, 2003.
Operating activities during the current nine-month period provided cash of
$298,000, compared to cash of $63,000 provided by operating activities during
the same period of 2003.
Cash of $49,000 was expended on investing activities during the current
nine-month period. $14,000 was expended for the purchase of computer equipment,
$9,000 for office equipment, $9,000 for telephone equipment, and $17,000 for the
purchase and development of software. The Company expended $161,000 on investing
activities during the same nine-month period of 2003 for the purchase of
automobiles, equipment, software, software development and building
improvements.
Financing activities during the current nine-month period used cash of
$166,000 and consisted of $96,000 in principle payment on an unsecured line of
credit, principal payments totaling $38,000 for notes payable, and $30,000 on
capital lease obligations. The Company also expended $2,000 for the purchase of
treasury stock. Financing activities during the same nine-month period of 2003
provided cash of $81,000 and consisted of $100,000 in proceeds from an unsecured
loan, $38,000 in loan proceeds for the purchase of four used automobiles and $50
in proceeds from the exercise of employee stock options, offset by principal
payments totaling $29,000 for notes payable, and $28,000 on capital lease
obligations.
During the current quarter, cash flow from operations was adequate to cover
all working capital and liquidity requirements. Despite the loss of the contract
with PHS as described in the Company's Form 10-K for the year ended December 31,
2003, management believes that current cash and cash equivalents and projected
cash flows from operations together with the Company's lines of credit,
factoring agreement, incentives under the Economic Development and Incentive
Agreement, capital leases and other potential financing should be sufficient to
support the Company's cash requirements.
CRITICAL ACCOUNTING POLICIES
Accounting principles generally accepted in the United States of America
require the use of management's judgments and estimates in addition to the rules
and requirements imposed by the accounting pronouncements. More detailed
information about UMC's accounting policies is contained in Note B, Summary of
Significant Accounting Policies, to our Condensed Consolidated Financial
Statements included in our 2002 Form 10-K. Other accounting policies not
discussed here are described there, and readers should review that information
carefully. We have summarized below the accounting policies that we believe are
most critical to understanding UMC's interim financial statements.
The Company reports financial information on a consolidated basis.
Therefore, unless there is an indication to the contrary, financial information
is provided for the parent company, United Medicorp, Inc., and its Subsidiary as
a whole. Transactions between the parent company and its subsidiary are
eliminated for this purpose. UMC owns all of the capital stock of its
subsidiary, and does not have any subsidiaries that are not consolidated. UMC
does not have any subsidiaries that are "off balance sheet", UMC has not entered
into any "off balance sheet" transactions, and UMC has no "special purpose
entities".
16
UNITED MEDICORP, INC. AND SUBSIDIARY
Management's Discussion and Analysis Of
Financial Condition and Results of Operations (Continued)
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets, liabilities, revenues
and expenses. Actual results could differ from these estimates.
The Company's billing and collection services revenue is recognized upon
receipt by the customer of payment from a third party payor or guarantor of a
patient's account and upon notification by the customer to the Company that such
payment has been received, or upon receipt of such payment by UMC. Coding
service revenue and fees for medical record storage services are recognized when
the services are performed.
Factored accounts receivable are accounted for pursuant to SFAS No. 140,
"Accounting for Transfers and Servicing of Financial Assets and Extinguishments
of Liabilities" ("SFAS No. 140"). Pursuant to SFAS No. 140, the Company treats
its factored accounts receivable as a sales transaction, and as such, no
liability is recognized for the amount of the proceeds received from the
transfer of the accounts receivable. UMC has a contingent liability to
repurchase any invoices that remain unpaid after 90 days. At September 30, 2004
there were no factored invoices outstanding.
The cost of software that is developed or purchased for internal use is
accounted for pursuant to AICPA Statement of Position 98-1, "Accounting for the
Costs of Computer Software Developed or Obtained for Internal Use" ("SOP 98-1").
Pursuant to SOP 98-1, the Company capitalizes costs incurred during the
application development stage of software developed for internal use, and
expenses costs incurred during the preliminary project and the
post-implementation operation stage's of development. During the first nine
months of 2004, the Company capitalized $11,300 in costs incurred for new
internal software development that was in the application development stage.
Item 3 - Quantitative and Qualitative Disclosures About Market Risk
The Company qualifies as a small business issuer as defined in Rule 12b-2 of
the Securities Exchange Act of 1934. As such, the Company is not required to
provide information related to the quantitative and qualitative disclosures
about market risk.
Item 4 - Controls and Procedures.
In order to ensure that the information that we must disclose in our filings
with the Securities and Exchange Commission is recorded, processed, summarized
and reported on a timely basis, we have adopted disclosure controls and
procedures. Our Chief Executive Officer, Peter W. Seaman, and our Chief
Financial Officer, Nathan E. Bailey, have reviewed and evaluated our disclosure
controls and procedures as of November 5, 2004, and concluded that our
disclosure controls and procedures are appropriate and that no changes are
required at this time.
There have been no significant changes in our internal controls, or in other
factors that could affect our internal controls, since November 5, 2004.
17
PART 11. Other Information
Item 1. Legal Proceedings
None
Item 2. Changes in Securities
None
Item 3. Default Upon Senior Securities
None
Item 4. Submission of Matters to a Vote of Security Holders
None
Item 5. Other Information
None
Item 6. Exhibits and Reports on Form 8-K
(A) Exhibits
EXHIBIT
NUMBER DESCRIPTION OF EXHIBIT
------ ----------------------
31-1 Section 302 - Certification of Chief Executive Officer
31-2 Section 302 - Certification of Chief Financial Officer
32-1 Section 906 - Certification of Chief Executive Officer
32-2 Section 906 - Certification of Chief Financial Officer
99.1 Safe Harbor Compliance Statement for Forward-Looking Statements
(B) Reports on Form 8-K:
The Company filed the following reports on Form 8-K during the quarter
ended September 30, 2004:
Item Reported: Announcement of Second Quarter Earnings
Date of report: August 16, 2004
Financial statements filed: None
18
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.
UNITED MEDICORP, INC.
(Registrant)
By: /s/ Nathan E. Bailey Date: November 12, 2004
-------------------------------- ------------------
Nathan E. Bailey
Vice President and Controller
(Principal Accounting Officer)
19