S. G. Reader & Associates, Inc.

Practice Management Consultants

January 30, 2012
Drs. Howard Golden and Michael Wax
2879 East Point Street
East Point, GA 30358
Re: Atlanta Injury Specialists
2879 East Point Street
East Point, GA 30358
Dear Drs. Golden and Wax:
Following the usual and customary (standard) principles in evaluating a clinic price, the (initial
trial run) evaluation price for Atlanta Injury Specialists as of January 30, 2012, is $90,474.00.
The $90,474.00 includes:
Furnishings and equipment - @ $26,289.00
Patient Files - @ $54,185.00
Leasehold Improvements @ $10,000.00
Sundries - @ N/A
Patient File evaluation is based on the Clinic's 12 month accumulative collections beginning
January 2010 and ending December 2011, less the Clinic's operating expenses ending 12 months
December 2011. The net cash flow (patient files) is multiplied by 12 months.
Evaluation Variable Final is set at $79,950.00
Evaluation Variable Final is a variable from the evaluation price and represents the final
evaluation price. Evaluation Variable Final is based primarily on:
1. Desirability of area.
2. Clinic establishment within the area.
3. Staff and patient momentum within the clinic.
4. General comp of what practices sold for within the region.
5. Net Income to Debt Service Ratio.
6. Collections to asking price ratio.
Net Income To Debt Service Ratio: 4.08
The evaluation is good through December 31, 2012.

EVALUATION NOTES
FURNITURE AND EQUIPMENT
Furnishings and equipment for the office were listed at (insurance) replacement (estimated
new price less 3% depreciation) value. All equipment and furnishings are in good condition.
Furnishings and equipment were listed by Drs. Howard Golden and Michael Wax to S.G.
Reader and Associates, Inc. as of January 2012.
PATIENT FILES
Patient files evaluation is based on the clinic's 12 month accumulative collections beginning
January 2010 and ending December 2011. Total collections of $109,165.00, less direct and
indirect overhead of $54,980.00, leaves a net cash flow of $54,185.00. The net cash flow of
$54,185.00 is multiplied by one year (12 months) equaling $54,185.00.
*The net cash flow multiplied variable ranges from 12 to 18 months. Collections to asking
price ratio, counter-balances and justifies the range to be multiplied.
LEASEHOLD IMPROVEMENTS
Leasehold improvements totaled approximately $10,000.00. These improvements were
absorbed (cash out of pocket) by Drs. Howard Golden and Michael Wax and not worked into
term of lease.
EVALUATION VARIABLE FINAL
Each of the six variables (listed on the cover sheet) has the potential to discount the evaluation
price by up to 6% per category and/or 45% per major anomaly.
Discounts applied - 5. Net Income to Debt Service Ratio.
*Of the six variables listed on the cover sheet, collections to asking price ratio and/or net
income to debt service ratio can increase or decrease the patient files value by adjusting the
percentage to industry standard.
Collections to asking price ratio, is 1.46%.
(i.e.: $116,774.00 collections divided by $79,950.00 asking price = 1.46%)
Atlanta Injury Specialists collections to asking price ratio places generously within industry
average. Collections to asking price industry ratio average range, 92-1.35%. Attempting to
adjust collections to asking price ratio to a modest range within industry average such as 1.24
to 1.28% was declined in order to meet the funders net income to debt service ratio comfort
cushion of 4.08. The net income to debt service ratio trumps collections to asking price ratio
in the final analysis. The collections to asking price ratio index chart is as follows: 92-1.02 =
poor, 1.03-1.11 = fair, 1.12-1.17 = good, 1.18-1.28 = great, 1.29-1.75 = superb. This chart
evolved by precedence created from a history of practice sales within the country or in other
words, a comp. The bulk of practice sales for this region lands within 1.24-1.35 on the index
chart.

NET INCOME TO DEBT SERVICE RATIO

The funders net income to debt service ratio is 4.08. In other words, the net income to the
owner of the clinic is well over four times after debt service to the funder. The comfort
cushion for the funder is usually 3 to 4 times the annual debt service. On the average, many
clinics will net 3 to 4 times its debt service. This, of course, is based on a 10 year note @
the current rate of 6% interest. The evaluation variable final of 4.08 is based on the sellers
asking price of $79,950.00. The 4.08 would place this clinic under the main stream (common
activity) for practice sale price.
For example:
$54,185.00 (net cash flow) - $10,651.00 (annual debt service) = $43,534.00 (net-net cash flow).
$43,534.00 (net-net cash flow) $10,651.00 (annual debt service) = 4.08 (net income to debt service ratio).
RECEIVABLES PLEASE NOTE: The receivables are not included in the practice evaluation. Industry standard will
separate the receivables from the Clinic evaluation, as receivables will fluctuate day to day. In the event buyer purchases the
receivables, a formula against the receivables will be applied just prior to purchase and/or close of sale.

Atlanta Injury Specialists

Total Discretionary Income
Profit & Loss
Jan-Dec 2011
CONTRACT LABOR DOCTOR

$100.00

MARKETING

$4,418.00

PAYROLL
SALARY D.C.
TAXES
PETTY CASH

$42,000.00
$3,717.00
$800.00

PROFESSIONAL FEES BOOKKEEPING

$1,943.00

TOTAL DISCRETIONARY INCOME (Add Backs)

$52,978.00

ADD BACKS WERE IDENTIFIED BY SGR, INC. WITH ASSISTANCE FROM

DR. HOWARD GOLDEN.

CONFIDENTIAL PROFILE
TYPE OF BUSINESS: CHIROPRACTIC OFFICE
NAME OF BUSINESS: ATLANTA INJURY SPECIALISTS
ADDRESS: 2879 EAST POINT STREET
CITY: EAST POINT STATE: GA ZIP: 30358
SELLERS NAME: DRS. HOWARD GOLDEN AND MICHAEL WAX
BUS. PHONE: DO NOT CALL OR DROP IN WITHOUT PERMISSION
OFFICE: (928) 282-8434
EVALUATED AT: $79,950.00
SELLERS ASKING PRICE: $79,950.00
INCOME STATUS
12 MONTH ACCUMULATIVE AVERAGE INCOME PERIOD: 01/10-12/11
COLLECTIONS: $109,165.00
NET CASH FLOW: $54,185.00
NEW PATIENTS: 95 - Est.
TOTAL VISITS: 999 - Est.
RETENTION: 10.51
CASE FEE: $1,149.10
CASH PER VISIT AV: $109.27
ASSETS
EQUIPMENT, FURNISHINGS: $26,289.00
GOODWILL $30,661.00
INVENTORY (AT COST): 0
SUNDRIES: N/A
NON-COMPETE COVENANT: $3,000.00
OTHER: Addl Furnishings: $10,000.00
TRADE NAME: $10,000.00
TOTAL: $79,950.00
GENERAL INFORMATION
YEARS ESTABLISHED: 6 YEARS
EMPLOYEES: 1-CA
YEARS BY OWNER: 6 YEARS
TRAINING PERIOD: OPEN
DAYS OPEN: 5 DAYS
SELLERS DUTIES: CHIROPRACTOR
HOURS OPEN: M/W/F 9-1, 3-7 - T/TH 12-7
REASON: RETIRING
TECHNIQUE: FULL SPINE / DROP

COMMENTS:
STRONG BLUE COLLAR IDEAL PERSONAL INJURY COMMUNITY. NEW DC CAN EASILY
DOUBLE or TRIPLE NUMBERS WITH LITTLE MARKETING AND ATTORNEY NETWORKING
SKILLS. PERFECT TURN-KEY PRACTICE OPPORTUNITY.