1
U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period Ended June 30, 1997
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from _____ to _____
Commission File No. 0-27836
EMBASSY ACQUISITION CORP.
-----------------------------------------------------------------
(Exact name of small business issuer as specified in its charter)
Florida 65-0643773
- ------------------------------- -------------
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
1428 Brickell Avenue, Suite 105
Miami, Florida 33131
----------------------------------------
(Address of principal executive offices)
(305) 374-6700
---------------------------
(Issuer's Telephone Number)
Check whether the issuer: (1) filed all reports required to be filed
by Section 13 or 15(d) of the Exchange Act during the past 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 June 30, 1997 the Company had a total of 2,540,000 shares (the
"Shares") of Common Stock, par value $.0001 per share (the "Common Stock")
outstanding. Additionally, as of such date Underwriter Options to purchase
120,000 shares of Common Stock (the "Underwriter Options") remain outstanding
and unexercised. Each Underwriter Option entitles the holder thereof to
purchase one share of Common Stock at a purchase price of $7.80 per share
through April 1, 2001.
Traditional Small Business Disclosure Format (check one)
Yes X No
--- ---
2
DOCUMENTS INCORPORATED BY REFERENCE
None
(ii)
3
EMBASSY ACQUISITION CORP.
FORM 10-QSB
QUARTER ENDED JUNE 30, 1997
TABLE OF CONTENTS
PART I . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
ITEM 1. FINANCIAL STATEMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION . . . . . . . . . . . . . . . . . . . . . 1
PART II . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
ITEM 1. LEGAL PROCEEDINGS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
ITEM 2. CHANGES IN SECURITIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
ITEM 3. DEFAULTS UPON SENIOR SECURITIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
ITEM 4. SUBMISSION OF MATTERS TO VOTE OF SECURITY HOLDERS . . . . . . . . . . . . . . . . . . . . . . . . . 4
ITEM 5. OTHER INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
SIGNATURES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
FINANCIAL STATEMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-1
(iii)
4
PART I
ITEM 1. FINANCIAL STATEMENTS
The unaudited, condensed financial statements included herein,
commencing at page F-1, have been prepared in accordance with the requirements
of Regulation S-B and supplementary financial information included herein, if
any, has been prepared in accordance with Item 310(b) of Regulation S-B and,
therefore, omit or condense certain footnotes and other information normally
included in financial statements prepared in accordance with generally accepted
accounting principles. In the opinion of management, all adjustments
(consisting only of normal recurring accruals) necessary for a fair presentation
of the financial information for the interim periods reported have been made.
Results of operations for the three and six months ended June 30, 1997 are not
necessarily indicative of the results for the year ending December 31, 1997.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
Embassy Acquisition Corp. (the "Company") was formed in November 1995
to seek to effect a merger, exchange of capital stock, asset acquisition or
similar business combination (a "Business Combination") with an acquired
business (an "Acquired Business"). In connection with its initial
capitalization, the Company issued an aggregate of 1,160,000 shares of Common
Stock to its officers, directors, and other shareholders for an aggregate sum of
$76,078. On April 2, 1996, the Company's Registration Statement on Form SB-2
(the "Registration Statement") was declared effective by the U.S. Securities and
Exchange Commission (the "SEC"). Pursuant to the Registration Statement, the
Company, in its initial public offering of securities, offered and sold
1,380,000 shares of Common Stock, par value $.0001 per share, at a purchase
price of $6.00 per share (the "Offering") and received net proceeds of
approximately $7,052,300 after the payment of all expenses of the Offering (the
"Net Proceeds"). In addition, the Company issued Underwriter Options to
purchase 120,000 shares of Common Stock. The Offering was a "blank check"
offering.
Liquidity and Capital Resources/Plan of Operation
As of June 30, 1997 and December 31, 1996, the Company had cash and
cash equivalents of $663,555 and $763,965, respectively and restricted
cash and cash equivalents of $6,716,268 and $6,566,206, respectively. As of
June 30, 1997 and December 31, 1996, the Company had total liabilities of
$52,408 and $79,963, respectively and common stock subject to redemption of
$7,337,334 and $7,260,022, respectively. 90% of the Net Proceeds ($7,052,300)
(the "Escrow Fund") were delivered to Fiduciary Trust International of the
South, as Escrow Agent, to be held in escrow by such firm, until the earlier of
(i) written notification by the Company of its need for all or substantially all
of the Escrow Fund for the purpose of implementing a Business Combination; or
(ii) the exercise by certain shareholders of the Redemption Offer (as defined in
the Registration Statement). As of June 30, 1997, there was 6,716,268 (at
market value) in the Escrow Fund. The Escrow Fund is currently invested in
United States government-backed short-term securities.
1
5
Other than the Escrow Fund, the Company, as of June 30, 1997, had
$663,555 in cash and cash equivalents all of which was received from the initial
capitalization and the Offering (other than interest income earned thereon) (the
"Operating Funds"). The Company believes the Operating Funds will be sufficient
for its cash requirements for at least the next twelve months.
For the three and six month periods ended June 30, 1997, the Company
incurred $38,087 and $14,591 of operating expenses and derived interest income
of $86,408 and $167,653, respectively as compared with the three and six month
periods ended June 30, 1996 when the Company incurred $14,591 and $14,591 of
operating expenses and derived interest income of $57,583 and $57,583.
On May 6, 1997, the Company entered into a letter of intent with
Orthodontix, Inc., a Florida corporation ("Orthodontix"), regarding a business
combination of the Company or its wholly-owned subsidiary and Orthodontix, Inc.
(the "Transaction").
The intended principal business activity of Orthodontix is providing
practice management services to orthodontic practices. Orthodontix has conducted
no operations to date other than in connection with its agreements in principle
to acquire certain assets, assume certain liabilities, and provide long-term
management services to certain orthodontic practices (the "Practices") in
exchange for cash and shares of common stock of Orthodontix (the "Practice
Acquisitions").
Under the terms of the letter of intent, upon the closing of the
Transaction, each share, or right to receive a share, of common stock of
Orthodontix (after giving effect to the closing of the Practice Acquisitions)
would be converted into the right to receive one share, or right to receive a
share, of common stock of the Company. Orthodontix has advised the Company that,
at the closing of the Transaction, (i) the Practices will, in the aggregate,
have generated gross revenue of no less than $20.0 million for the year ended
December 31, 1996; and (ii) in connection with the Practice Acquisitions,
Orthodontix shall deliver aggregate consideration of no more than $1.20 of value
(consisting of up to 10% cash consideration and the remainder consideration in
stock, which stock will be valued at the average of the closing bid and ask
price of the Common Stock of the Company for the 15 trading days immediately
preceding the closing of the Practice Acquisitions) for each $1.00 of gross
revenue generated by each of the Practices for the year ended December 31, 1996.
Based upon the price per share of the common stock of the Company as of May 6,
1997, at the closing of the Practice Acquisitions (assuming the Practice
Acquisitions represent orthodontic practices totaling $20 million of revenue)
and the Transaction, the Company would be obligated to issue approximately 2.8
million shares of Common Stock and expend up to approximately $2.5 million in
consideration for the Transaction. The Company currently has outstanding
2,540,000 shares of Common Stock and options entitling the holder to purchase
an additional 120,000 shares of Common Stock. The Transaction is contemplated to
be tax-free to the Company and its shareholders. Upon effectiveness of the
Transaction, the Company would change its name to "Orthodontix, Inc.," Stephen
J. Dresnick, M.D., a member of the Company's Board of Directors, President and
Chief Executive Officer of Sterling Healthcare Group, Inc. and Vice Chairman of
the Board of FPA Medical Management, Inc., would become Chairman of the Board
of Directors of the surviving entity of the Transaction, three of the members
of that Board of Directors would be appointed by Orthodontix and two of the
members of that Board of Directors would be appointed by the Company.
The closing of the Transaction is subject to, among other conditions,
the execution of a definitive agreement by 5:00 p.m., EST on August 30, 1997
(unless that date is extended by mutual agreement of the parties), approval of
the Transaction by the shareholders of the Company, Orthodontix, and each of the
Practices, certain regulatory and third party approvals and consents, and the
closing, simultaneously with the closing of the Transaction, of the Practice
Acquisitions. There can be no assurance that the proposed Transaction will be
consummated on these or any other terms.
2
6
Key-man Insurance
The Company has obtained a $1,000,000 "key man" policy insuring the
life of Glenn L. Halpryn, the Company's President and a member of the Board of
Directors. There can be no assurances that such "key man" insurance will be
maintained at reasonable rates, if at all. The loss, incapacity or
unavailability of Mr. Halpryn at the present time or in the foreseeable future,
before a qualified replacement was obtained, could have a material, adverse
effect on the Company's operations.
Conflicts of Interest
None of the Company's key personnel are required to commit their full
time to the affairs of the Company and, accordingly, such personnel may have
conflicts of interest in allocating management time among various business
activities. The Company's officers devote approximately 20% of their time to the
affairs of the Company. Certain of these key personnel are or may in the future
become affiliated with entities, including other "blank check" companies,
engaged in business activities similar to those intended to be conducted by the
Company.
In the course of their other business activities, including private
investment activities, the Company's officers and directors may become aware
of investment and business opportunities which may be appropriate for
presentation to the Company as well as the other entities with which they are
affiliated. Such persons may have conflicts of interest in determining to
which entity a particular business opportunity should be presented. In
general, officers and directors of corporations incorporated under the laws of
the State of Florida are required to present certain business opportunities to
such corporations. Accordingly, as a result of multiple business affiliations,
the Company's officers and directors may have similar legal obligations
relating to presenting certain business opportunities to multiple entities. In
addition, conflicts of interest may arise in connection with evaluations of a
particular business opportunity by the Board of Directors with respect to the
foregoing criteria. There can be no assurances that any of the foregoing
conflicts will be resolved in favor of the Company.
In order to minimize potential conflicts of interest which may arise
from multiple corporate affiliations, each of the Company's officers and
directors have agreed that, in the event any of them believes that a
business combination opportunity would be appropriate to be considered by an
entity other than the Company with which such officer or director is affiliated
(the "Other Entity"), so long as this affiliation with the Other Entity existed
prior to November 30, 1995, then the Company will be presented with the
business combination opportunity only after the Other Entity has determined not
to pursue such business combination opportunity.
3
7
PART II
ITEM 1. LEGAL PROCEEDINGS
The Company is not a party to, nor is it aware of, any pending
litigation to which it is a party or of which its property is subject.
ITEM 2. CHANGES IN SECURITIES
None.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4. SUBMISSION OF MATTERS TO VOTE OF SECURITY HOLDERS
During the second quarter ended June 30, 1997, no matters were
submitted to a vote of security holders of the Company through the
solicitation of proxies or otherwise.
ITEM 5. OTHER INFORMATION
None.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits.
27. Financial Data Schedule
(b) Reports on Form 8-K.
(1) Report on Form 8-K dated May 6, 1997 regarding letter
of intent with Orthodontix, Inc.
4
8
SIGNATURES
In accordance with 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.
EMBASSY ACQUISITION CORP.
Date: August 11, 1997 By: /s/ Glenn L. Halpryn
----------------------------------------
Glenn L. Halpryn, President
Date: August 11, 1997 By: /s/ Craig A. Brumfield
----------------------------------------
Craig A. Brumfield, Vice President,
Treasurer, Principal Financial Officer
and director
5
9
FINANCIAL STATEMENTS
F-1
10
INDEX TO FINANCIAL STATEMENTS
Balance Sheets as of June 30, 1997 and December 31, 1996 ................. F-3
Statement of Operations for the Three and Six Months Ended June 30, 1997
and 1996 and for the Period from November 30, 1995 (date of inception)
to June 30, 1997 ..................................................... F-4
Statements of Cash Flows for the Three and Six Months Ended June 30, 1997
and 1996 and the Period from November 30, 1995 (date of inception) to
June 30, 1997 ........................................................ F-5
Notes to Financial Statements ............................................. F-6 - F-9
F-2
11
EMBASSY ACQUISITION CORP.
(A Development Stage Corporation)
BALANCE SHEETS
ASSETS
June 30, 1997 December 31, 1996
------------- ------------------
(unaudited)
CURRENT ASSETS:
Cash and cash equivalents $ 663,555 $ 763,965
Restricted cash and cash equivalents 6,716,268 6,566,206
Accrued interest receivable 1,447 1,342
---------- ----------
Total current assets 7,381,270 7,331,513
Deferred tax assets 8,472 8,472
---------- ----------
Total assets $7,389,742 $7,339,985
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accrued expenses $ -- $ 3,487
Income taxes payable 52,408 76,476
---------- ----------
Total liabilities 52,408 79,963
COMMON STOCK SUBJECT TO REDEMPTION 7,337,334 7,260,022
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY:
Common stock, $.0001 par value, 100,000,000 shares
authorized, 2,540,000 issued and outstanding at June 30,
1997 and at December 31, 1996 -- --
Retained earnings accumulated during the development stage -- --
Total stockholders' equity -- --
---------- ----------
Total liabilities and stockholders' equity $7,389,742 $7,339,985
========== ==========
See accompanying notes to financial statements
F-3
12
EMBASSY ACQUISITION CORP.
(A Development Stage Corporation)
STATEMENTS OF OPERATIONS
For the Period from
November 30, 1995
For the Three Months Ended June 30, For the Six Months Ended June 30, (date of inception)
1997 1996 1997 1996 to June 30, 1997
----------- ----------- ----------- ----------- ------------------
(unaudited) (unaudited) (unaudited)
OPERATING REVENUES $ -- $ -- $ -- $ -- $ --
----------- ----------- ----------- ---------- ---------
OPERATING EXPENSES:
General and administrative 38,087 14,591 50,410 14,591 94,468
----------- ----------- ----------- ---------- ---------
Total operating expenses 38,087 14,591 50,410 14,591 94,468
----------- ----------- ----------- ---------- ---------
Loss from operations (38,087) (14,591) (50,410) (14,591) (94,468)
----------- ----------- ----------- ---------- ---------
Other income:
Interest income 86,408 57,583 167,653 57,583 411,396
----------- ----------- ----------- ---------- ---------
Other income 86,408 57,583 167,653 57,583 411,396
----------- ----------- ----------- ---------- ---------
Income before income tax provision 48,321 42,992 117,243 42,992 316,928
Income tax provision 16,430 16,178 39,931 16,178 107,935
----------- ----------- ----------- ---------- ---------
Net income $ 31,891 $ 26,814 $ 77,312 $ 26,814 $ 208,993
=========== =========== =========== ========== =========
Net income per share $ 0.01 $ 0.01 $ 0.03 $ 0.01
= =========== =========== =========== ==========
Weighted average common and common stock
equivalent shares outstanding: 2,542,560 2,418,681 2,541,280 1,789,341
=========== =========== =========== ==========
See accompanying notes to financial statements
F-4
13
EMBASSY ACQUISITION CORP.
(A Development Stage Corporation)
STATEMENTS OF CASH FLOWS
For the Period From
November 30, 1995
For the Six Months Ended June 30, (date of inception) to
1997 1996 June 30, 1997
------------ ------------ ---------------------
(unaudited) (unaudited)
Cash flows from operating activities:
Net income $ 77,312 $ 26,814 $ 208,993
Adjustment to reconcile net income to net cash used in
operating activities:
Deferred income taxes -- -- (8,472)
Net interest on restricted cash and cash equivalents (167,653) -- (411,396)
Changes in certain assets and liabilities:
Accrued interest receivable (105) (1,729) (105)
Accrued expenses (3,487) -- --
Income taxes payable (24,068) 16,178 52,408
--------- ----------- -----------
Net cash (used in) provided by operating activities (118,001) 41,263 (158,572)
--------- ----------- -----------
Cash flows from investing activities:
Increase (decrease) in restricted cash and cash equivalents 17,591 (6,397,954) (6,306,214)
--------- ----------- -----------
Net cash provided by (used in) investing activities 17,591 (6,397,954) (6,306,214)
--------- ----------- -----------
Cash flows from financing activities:
Net proceeds from issue of common stock -- 7,052,263 7,128,341
--------- ----------- -----------
Net cash provided by financing activities -- 7,052,263 7,128,341
--------- ----------- -----------
Net (decrease) increase in cash and cash equivalents (100,410) 695,572 663,555
Cash and cash equivalents at beginning of period 763,965 76,078 --
--------- ----------- -----------
Cash and cash equivalents at end of period $ 663,555 $ 771,650 $ 663,555
========= =========== ===========
See accompanying notes to financial statements
F-5
14
EMBASSY ACQUISITION CORP.
(A Development Stage Corporation)
NOTES TO FINANCIAL STATEMENTS
June 30, 1997
(Unaudited)
(1) Basis of Presentation:
The accompanying interim financial statements presented herein do not include
all disclosures provided in the annual financial statements. These unaudited
financial statements should be read in conjunction with the annual financial
statements and the footnotes for the fiscal year ended on December 31, 1996
thereto contained in the Form 10-KSB of Embassy Acquisition Corp. (the
"Company") as filed with the U.S. Securities and Exchange Commission on March
27, 1997.
In the opinion of the Company, the accompanying unaudited financial statements
contain all adjustments, which are of a normal recurring nature, necessary for
a fair presentation of the financial statements. The results of operations for
the three and six months ending June 30, 1997 are not necessarily indicative of
the results of operation to be expected for the full year.
(2) Organization:
On April 9, 1996, the Company sold to the public 1,380,000 shares of its common
stock, including 180,000 shares purchased by the underwriter to cover
overallotments, $0001 par value at a price of $6 per share (the "Offering").
Proceeds totaled $7,052,263, which was net of $1,226,300 in underwriting and
other expenses.
In connection with the Offering, the Company sold to the managing underwriter
(the "Underwriter") and its designees, for total consideration of $10, stock
purchase options ("the "Underwriter Options") to purchase up to 120,000 shares
of the Company's common stock at an exercise price of $7.80 per share. The
Underwriter Options will be exercisable for a period of five years from the
effective date of the Company's Registration Statement. The Company has also
agreed to certain registration rights with respect to the shares underlying the
Underwriter Options.
In accordance with the Offering, 90% of the net proceeds therefrom were placed
in an interest bearing escrow account (the "Escrow Fund") subject to the
earlier of (i) written notification by the Company of its need for all or
substantially all of the Escrow Fund for the purpose of implementing a business
combination, (ii) the
F-6
15
EMBASSY ACQUISTION CORP.
(A Development Stage Corporation)
NOTES TO FINANCIAL STATEMENTS
June 30, 1997
(Unaudited)
(2) Organization (continued):
exercise by certain shareholders of the Redemption Offer, as defined, or (iii)
the expiration of no more than 30 months from the date of the Offering. Amounts
in the Escrow Fund, including interest earned thereon, are prohibited from
being used for any purpose other that a business combination. Such amounts are
included in restricted cash and cash equivalents at June 30, 1997.
In the event the Company does not successfully effect a business combination
within 24 months (or in certain circumstances 30 months) from the date of the
consummation of the Offering, the Company will submit a proposal to liquidate
the Company. If such proposal is approved, the Company will distribute the
Company's Liquidation Value, as defined, to the Public Stockholders. Since the
Company may be required to refund all available equity to the Public
Shareholders, such amounts have been classified in the accompanying balance
sheet as common stock subject to redemption. Periodic changes in the
Liquidation Value are reflected as adjustments to stockholders' equity.
(3) Business Combination:
On May 6, 1997, the Company entered into a letter of intent with Orthodontix,
Inc., a Florida corporation ("Orthodontix"), regarding a business combination
of the Company or a newly formed wholly-owned subsidiary and Orthodontix, Inc.
(the "Transaction").
The intended principal business activity of Orthodontix is providing practice
management services to orthodontic practices. Orthodontix has conducted no
operations to date other than in connection with its agreements in principle to
acquire certain assets, assume certain liabilities, and provide long-term
management services to certain orthodontic practices (the "Practices") in
exchange for cash and shares of common stock of Orthodontix (the "Practice
Acquisitions").
Under the terms of the letter of intent, upon the closing of the Transaction,
each share, or right to receive a share, of common stock of Orthodontix (after
giving effect to the closing of the Practice Acquisitions) would be converted
into the right to receive one share, or right to receive a share, of common
stock of the Company. Orthodontix has advised the Company that, at the closing
of the Transaction, (i) the
F-7
16
EMBASSY ACQUISITION CORP.
(A Development Stage Corporation)
NOTES TO FINANCIAL STATEMENTS
June 30, 1997
(Unaudited)
(3) Business Combination (continued):
Practices will, in the aggregate, have generated gross revenue of no less than
$20.0 million for the year ended December 31,1996; and (ii) in connection with
the Practice Acquisitions, Orthodontix shall deliver aggregate consideration of
no more than $1.20 of value (consisting of up to 10% cash consideration and the
remainder consideration in stock, which stock will be valued at the average of
the closing bid and ask price of the Common Stock of the Company for the 15
trading days immediately preceding the closing of the Practice Acquisitions)
for each $1.00 of gross revenue generated by each of the Practices for the year
ended December 31, 1996. Based upon the price per share of the common stock of
the Company as of May 6, 1997, at the closing of the Practice Acquisitions
(assuming the Practice Acquisitions represent orthodontic practices totaling
$20 million of revenue) and the Transaction, the Company would be obligated to
issue approximately 2.8 million shares of Common Stock and expend up to
approximately $2.5 million in consideration for the Transaction. The Company
currently has outstanding 2,540,000 shares of Common Stock and Underwriter
Options entitling the holder to purchase an additional 120,000 shares of Common
Stock. The Transaction is contemplated to be tax-free to the Company and its
shareholders. Upon effectiveness of the Transaction, the Company would change
its name to "Orthodontix, Inc.," Stephen J. Dresnick, M.D., a member of the
Company's Board of Directors, President and Chief Executive Officer of Sterling
Healthcare Group, Inc., and Vice Chairman of the Board of FPA Medical
Management Inc., would become Chairman of the Board of Directors of the
surviving entity of the Transaction, three of the members of that Board of
Directors would be appointed by Orthodontix and two of the members of that
Board of Directors would be appointed by the Company.
The closing of the Transaction is subject to, among other conditions, the
execution of a definitive agreement by 5:00 p.m., EST on August 30, 1997
(unless that date is extended by mutual agreement of the parties), approval of
the Transaction by the shareholders of the Company, Orthodontix, and each of
the Practices, certain regulatory and third party approvals and consents, and
the closing, simultaneously with the closing of the Transaction, of the
Practice Acquisitions. There can be no assurances that the proposed Transaction
will be consummated on these or any other terms.
F-8
17
EMBASSY ACQUISITION CORP.
(A Development Stage Corporation)
NOTES TO FINANCIAL STATEMENTS
June 30, 1997
(Unaudited)
(4) Recent Accounting Pronouncements:
In February 1997, Statement of Financial Accounting Standards ("SFAS") No. 128
"Earnings Per Share" was issued. SFAS No. 128 establishes new standards for
computing and presenting earnings per share ("EPS"). This statement replaces
the presentation of primary EPS and will require a dual presentation of basic
and diluted EPS. SFAS No. 128 is effective for financial statements issued for
periods ended after December 31, 1997 and requires restatement of all
prior-period EPS data presented. The Company does not believe the adoption of
SFAS No. 128 will have a material impact on the Company's financial statements
when adopted.
F-9
5
3-MOS
DEC-31-1997
APR-01-1997
JUN-30-1997
663,555
6,716,268
1,447
0
0
7,381,270
0
0
7,389,742
52,408
0
0
0
0
0
7,389,742
0
0
0
0
38,087
0
0
48,321
16,430
31,891
0
0
0
31,891
0.01
0.01
