<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
------------------------------
FORM 8-K/A
Current Report Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): December 15, 1998
NM HOLDINGS, INC.
------------------------------------------------------
(Exact name of registrant as specified in its charter)
Minnesota 0-22247 41-1756256
- ---------------------------- ------------------------ --------------------
(State or other jurisdiction (Commission file number) (I.R.S. Employer
of incorporation) Identification No.)
9850 51st Avenue North, Suite 110, Minneapolis, Minnesota 55442
---------------------------------------------------------------
(Address of principal executive offices)
Registrant's telephone number, including area code: (612) 551-9595
--------------------
<PAGE>
The undersigned registrant hereby amends its Current Report on Form 8-K for
an event which occurred on December 15, 1998, as set forth below.
Item 2. ACQUISITION OR DISPOSITION OF ASSETS.
This item has not been amended from the registrant's Current Report on
Form 8-K for an event which occurred on December 15, 1998.
Item 5. OTHER EVENTS.
This item has not been amended from the registrant's Current Report on
Form 8-K for an event which occurred on December 15, 1998.
Item 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
(a) FINANCIAL STATEMENTS OF BUSINESS ACQUIRED
Not applicable.
(b) PRO FORMA FINANCIAL INFORMATION
The following tables set forth the unaudited pro forma financial
information (the "Unaudited Pro Forma Financial Statements") of Nutrition
Medical, Inc. (now known as NM Holdings, Inc.) (the "Company"), which consists
of (i) the pro forma balance sheet of the Company as of December 31, 1998,
giving effect on such date to the asset sale transactions by and between the
Company and ZEVEX, Inc. (the "ZEVEX Transaction") and GalaGen Inc. (the "GalaGen
Transaction"), respectively (as more particularly described in the Company's
Form 8-K filed on January 6, 1999), and (ii) the pro forma statements of
operations of the Company for the fiscal years ended December 31, 1998 and the
December 31, 1997, respectively, giving effect to the ZEVEX Transaction and the
GalaGen Transaction as if such transactions had occurred on January 1, 1997.
The Unaudited Pro Forma Financial Statements and the related notes are
provided for illustrative purposes only and are not necessarily indicative of
the balance sheets and statements of operations that would have been reported
had the ZEVEX Transaction and the GalaGen Transaction occurred on the dates
indicated, nor do they represent a forecast of the financial position at any
future period. The Unaudited Pro Forma Financial Statements and the related
notes should be read in conjunction with the historical financial statements and
related notes of the Company and GalaGen Inc. which are included in the
Company's Definitive Proxy Statement on Schedule 14A filed with the Securities
and Exchange Commission on December 9, 1998.
-2-
<PAGE>
NM HOLDINGS, INC.
PRO FORMA STATEMENT OF OPERATIONS
FOR THE
YEAR ENDED DECEMBER 31, 1997
<TABLE>
<CAPTION>
PRO-FORMA STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1997
----------------------------------------------------------------------------
UNADJUSTED ADJUSTMENT FOR ADJUSTMENT FOR ADJUSTED
STATEMENT OF ZEVEX, INC. GALAGEN INC. STATEMENT OF
OPERATIONS (1)(3) (2)(3) OPERATIONS
--------------- ----------------- ----------------- ---------------
<S> <C> <C> <C> <C>
Sales . . . . . . . . . . . . . . . . . . . . . . $ 4,104,601 $ (2,306,586) $ (1,378,375) $ 419,640
Cost of goods . . . . . . . . . . . . . . . . . . 2,811,443 (1,937,755) (614,455) 259,233
--------------- ----------------- ----------------- ---------------
Gross margin . . . . . . . . . . . . . . . . . . 1,293,158 (368,831) (763,920) 160,407
Selling, general and administrative . . . . . . . 2,538,184 (687,533) (879,002) 971,649
Research and development . . . . . . . . . . . . 627,438 (31,516) (74,940) 520,982
Goodwill amortization and writeoff . . . . . . . 1,853,936 (1,853,936) -- --
--------------- ----------------- ----------------- ---------------
Total operating expenses. . . . . . . . . . . . 5,019,558 (2,572,985) (953,942) 1,492,631
--------------- ----------------- ----------------- ---------------
Operating income (loss) . . . . . . . . . . . . . (3,726,400) 2,204,154 190,022 (1,332,224)
Interest income (expense) . . . . . . . . . . . . (69,215) 195,184 -- 125,969
Income (loss) from continuing operations . . . . (3,795,615) 2,399,338 190,022 (1,206,255)
Loss from discontinued operations . . . . . . . . (365,023) -- -- (365,023)
Net income (loss) . . . . . . . . . . . . . . . . $ (4,160,638) $ 2,399,338 $ 190,022 $ (1,571,278)
--------------- ----------------- ----------------- ---------------
--------------- ----------------- ----------------- ---------------
Loss per share data
Loss from continuing operations . . . . . . $ (2.80) -- -- $ (1.06)
Loss from discontinued operations . . . . . (0.27) -- -- (0.32)
--------------- ----------------- ----------------- ---------------
Net loss per share . . . . . . . . . . . . . . . $ (3.07) $ -- $ -- $ (1.38)
--------------- ----------------- ----------------- ---------------
--------------- ----------------- ----------------- ---------------
Weighted average number of shares
outstanding . . . . . . . . . . . . . . . . . . 1,355,631 (213,750) -- 1,141,881
--------------- ----------------- ----------------- ---------------
--------------- ----------------- ----------------- ---------------
</TABLE>
- -------------------
(1) Represents all revenues and expenses associated with the Company's pump and
plastic disposables business (the "Pump Business") that have been excluded
to adjust for the assumed sale of the Pump Business on January 1, 1997.
(2) Represents all revenues and expenses associated with the Company's critical
care business, except L-Emental-TM- Plus, that have been excluded to adjust
for the assumed sale of the Company's critical care business on January 1,
1997.
(3) Overhead costs were allocated to each business based on specific
identification where possible and an allocation based on proportional
revenues.
-3-
<PAGE>
NM HOLDINGS, INC.
PRO FORMA STATEMENT OF OPERATIONS
FOR THE
YEAR ENDED DECEMBER 31, 1998
<TABLE>
<CAPTION>
PRO-FORMA STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1998
------------------------------------------------------------------------
UNADJUSTED ADJUSTMENT FOR ADJUSTMENT FOR ADJUSTED
STATEMENT OF ZEVEX, INC. GALAGEN INC. STATEMENT OF
OPERATIONS (1)(3) (2)(3) OPERATIONS
-------------- ----------------- --------------- --------------
<S> <C> <C> <C> <C>
Sales . . . . . . . . . . . . . . . . . . . . . . . $ 4,011,545 $ (2,379,563) $ (1,113,024) $ 518,958
Cost of goods . . . . . . . . . . . . . . . . . . . 2,851,519 (1,850,338) (708,251) 292,930
-------------- ----------------- --------------- --------------
Gross margin . . . . . . . . . . . . . . . . . . . 1,160,026 (529,225) (404,773) 226,028
Selling, general and administrative(4) . . . . . . 2,222,636 (709,542) (1,007,589) 505,505
Research and development . . . . . . . . . . . . . 80,300 (10,996) (28,271) 41,033
-------------- ----------------- --------------- --------------
Total operating expenses. . . . . . . . . . . . . 2,302,936 (720,538) (1,035,860) 546,538
-------------- ----------------- --------------- --------------
Operating income (loss) . . . . . . . . . . . . . . (1,142,910) 191,313 631,087 (320,510)
Interest income (expense) . . . . . . . . . . . . . (142,207) 227,674 -- 85,467
Other income(5) 1,340,898 -- -- 1,340,898
-------------- ----------------- --------------- --------------
Income (loss) from continuing operations . . . . . 55,781 418,987 631,087 1,105,855
Loss from discontinued operations . . . . . . . . . 25,187 -- -- 25,187
-------------- ----------------- --------------- --------------
Net income (loss) . . . . . . . . . . . . . . . . . $ 80,968 $ 418,987 $ 631,087 $ 1,131,042
-------------- ----------------- --------------- --------------
-------------- ----------------- --------------- --------------
Loss per share data
Loss from continuing operations . . . . . . . . . $ 0.04 -- -- $ 0.96
Loss from discontinued operations . . . . . . . . 0.02 -- -- 0.02
-------------- ----------------- --------------- --------------
Net loss per share . . . . . . . . . . . . . . . . $ 0.06 -- -- $ 0.98
-------------- ----------------- --------------- --------------
-------------- ----------------- --------------- --------------
Weighted average number of shares
outstanding . . . . . . . . . . . . . . . . . . . 1,364,005 (213,750) -- 1,150,255
-------------- ----------------- --------------- --------------
-------------- ----------------- --------------- --------------
</TABLE>
- ---------------
(1) Represents all revenues and expenses associated with the Pump Business that
have been excluded to adjust for the assumed sale of the Pump Business on
January 1, 1997.
(2) Represents all revenues and expenses associated with the Company's critical
care business, except L-Emental-TM- Plus, that have been excluded to adjust
for the assumed sale of the Company's critical care business on January 1,
1997.
(3) Overhead costs were allocated to each business based on specific
identification where possible and an allocation based on proportional
revenues.
-4-
<PAGE>
(4) Includes costs incurred in connection with the Company's settlement of
litigation with Novartis Nutrition, Inc. ("Novartis") pursuant to which the
Company agreed to pay Novartis $450,000 in cash, and agreed to discontinue
production of L-Emental-TM- Plus.
(5) Includes gain resulting from the consummation of the ZEVEX Transaction and
GalaGen Transaction.
-6-
<PAGE>
NM HOLDINGS, INC.
PRO FORMA BALANCE SHEET
AS OF DECEMBER 31, 1998
<TABLE>
<CAPTION>
Unadjusted
Balance ZEVEX, Inc. GalaGen Inc. Adjusted Balance
December 31, 1998 Adjustments Adjustments December 31, 1998
------------------ --------------- ---------------- -----------------
<S> <C> <C> <C> <C>
ASSETS
Current Assets
Cash . . . . . . . . . . . . . . . . . . $ 1,675,225 $ 188,627(1) $ 71,516 (2) $ 1,935,368
Accounts receivable . . . . . . . . . . . 155,966 126,514(3) -- 282,480
Inventory . . . . . . . . . . . . . . . . 446,794 (377,227)(4) (69,567)(5) --
Prepaid expenses. . . . . . . . . . . . . 98,800 -- (6,846)(6) 91,954
------------------ --------------- ---------------- -----------------
Total current assets. . . . . . . . . . 2,376,785 (62,086) (4,897) 2,309,802
Property and equipment (net) . . . . . . . 812,407 (699,975)(7) (87,855)(8) 24,577
Other investments . . . . . . . . . . . . . -- -- 498,125(9) 498,125
------------------ --------------- ---------------- -----------------
Total assets . . . . . . . . . . $ 3,189,192 $ (762,061) $ 405,373 $ 2,832,504
------------------ --------------- ---------------- -----------------
------------------ --------------- ---------------- -----------------
LIABILITIES AND EQUITY
Current liabilities
Accounts payable. . . . . . . . . . . . . $ 189,441 -- -- $ 189,441
Payroll liabilities . . . . . . . . . . . 4,690 -- -- 4,690
Accrued expenses. . . . . . . . . . . . . 105,587 100,000(10) 50,000(10) 255,587
------------------ --------------- ---------------- -----------------
Total current liabilities . . . . . . . 299,718 100,000 50,000 449,718
Note payable. . . . . . . . . . . . . . . . 2,016,608 (2,016,608)(11) -- --
------------------ --------------- ---------------- -----------------
Total liabilities . . . . . . . . . . . 2,316,326 (1,916,608) 50,000 449,718
Equity
Common stock. . . . . . . . . . . . . . . 54,560 (8,550)(11) -- 46,010
Paid-in capital . . . . . . . . . . . . . 8,706,435 -- -- 8,706,435
Retained earnings . . . . . . . . . . . . (7,888,129) 1,163,097(12) 355,373(12) (6,369,659)
------------------ --------------- ---------------- -----------------
Total equity. . . . . . . . . . . . . . . 872,866 1,154,547 355,373 2,382,786
------------------ --------------- ---------------- -----------------
Total liabilities and equity. . . . . . . $ 3,189,192 $ (762,061) $ 405,373 $ 2,832,504
------------------ --------------- ---------------- -----------------
------------------ --------------- ---------------- -----------------
</TABLE>
- -------------------------
(1) Represents cash received from the ZEVEX Transaction, net of amounts held in
escrow, amounts transferred to Elan International Services, Ltd. ("EIS") in
settlement of the promissory note dated January 13, 1997 issued by the
Company to Elan Pharma Inc. (the "Promissory Note"), and cancellation of
the 213,750 shares of the Company's common stock, $.04 par value (the
"Common Stock"), previously held by EIS (the "Elan Owned Shares").
(2) Represents cash received from the GalaGen Transaction.
(3) Represents a cash amount held in escrow pursuant to the terms and
conditions of the ZEVEX Transaction.
(4) Represents inventory transferred to ZEVEX, Inc. as part of the sale of the
Pump Business. This inventory includes a supply of certain enteral feeding
tubes that constitutes more than a 9 to 12 month supply based on Company
historical sales that was not accepted by ZEVEX, Inc. This inventory would
have been saleable by the Company if it had continued the Pump Business.
-6-
<PAGE>
(5) Represents inventory transferred to GalaGen Inc. as part of the sale of the
Company's critical care business. This inventory includes the cost of
certain inventory that was rendered obsolete upon the consummation of the
GalaGen Transaction (including nutrition bars, packaging materials and
miscellaneous raw materials) due to GalaGen Inc.'s desire to discontinue
the manufacture and sale of such products.
(6) Represents amounts reimbursed to the Company by GalaGen Inc. for certain
prepaid expenses transferred to GalaGen Inc.
(7) Represents the book value of equipment (primarily enteral feeding pumps and
manufacturing equipment) transferred to ZEVEX, Inc.
(8) Amount that represents the book value of equipment, comprised primarily of
warehouse and office equipment transferred to GalaGen Inc.
(9) Represents the market price of the 318,800 shares of common stock, $.01 par
value, of GalaGen Inc. (the "GalaGen Shares") received by the Company upon
the consummation of the GalaGen Transaction.
(10) Represents legal, accounting and other fees and expenses related to the
ZEVEX Transaction and GalaGen Transaction.
(11) Represents the cancellation of the Promissory Note in return for $450,000
of the proceeds and 115,000 shares of the common stock, $.001 of ZEVEX
International, Inc. (the "ZEVEX Shares") received in the ZEVEX Transaction.
In connection with such cancellation, the Company issued a warrant to Elan
Pharma, Inc. to purchase 50,000 shares of Common Stock at an exercise price
of $3.50 per share exercisable for the three year period commencing on the
date of issuance. The warrant has not been assigned any value because the
market price of the Common Stock is significantly below the exercise price.
Upon receipt, the Company also retired the Elan Owned Shares. These shares
are deemed to be authorized but unissued shares of Common Stock. Since the
redeemed shares are recorded at par value, no gain was attributed to the
redemption of the Elan Owned Shares.
(12) (a) In exchange for the assets related to the Pump Business, the Company
received, in connection with the ZEVEX Transaction, as consideration
$500,000 in cash, an additional amount of $265,141, which represents
an amount equal to the Company's actual cost of inventory of parts and
materials for the manufacturing and repair of internal feeding pump
and plastic disposable products and finished products, and the ZEVEX
Shares, which had a value as of the ZEVEX Transaction closing date of
$539,063. The book value of the assets transferred by the Company to
ZEVEX, Inc., was $699,975. The Company also accrued $90,000 to cover
the estimated costs and expenses associated with the ZEVEX Transaction
and to create inventory reserves in connection therewith. The gain
from the consummation of the ZEVEX Transaction was $137,002,
calculated as follows:
-7-
<PAGE>
<TABLE>
<S> <C>
Cash and Escrowed Amounts $ 765,141
ZEVEX Shares 539,063
--------------
Total Consideration Received 1,304,204
Inventory 377,227
Fixed Assets 699,975
Transaction Costs and Expenses 90,000
--------------
Book Value of Assets and
Related Expenses 1,167,202
--------------
Gain $ 137,002
--------------
--------------
</TABLE>
(b) The Company transferred to EIS, the ZEVEX Shares and $450,000 cash
received by the Company upon the closing of the ZEVEX Transaction and
issued a warrant to purchase 50,000 shares of Common Stock at a
purchase price of $3.50 per share in exchange for the redemption of
the Elan Owned Shares and the cancellation of the Promissory Note.
Outstanding principal and accrued interest payable to EIS under the
Promissory Note as of December 23, 1998 was $2,016,608. Because the
Common Stock is reported at par value, no gain was attributed to the
redemption of the shares of Common Stock. As a result, the Company
reported a gain on the EIS portion of the ZEVEX Transaction of
$1,026,095 calculated as follows:
<TABLE>
<S> <C>
Cancellation of Promissory Note $ 2,016,608
Cancellation of Elan Owned Shares 8,550
--------------
Total Consideration Received 2,025,158
Cash 450,000
ZEVEX Shares Issued to Elan Pharma 539,063
Transaction Costs and Expenses 10,000
--------------
999,063
--------------
Gain on Settlement $ 1,026,095
--------------
--------------
</TABLE>
(c) In exchange for the assets related to the Company's critical care
business, the Company received, in connection with the GalaGen
Transaction, as consideration $71,516 and the GalaGen Shares valued as
of the GalaGen Transaction closing date at $498,125. The book value
of the assets transferred by the Company to GalaGen Inc., was $87,855.
The Company also accrued $50,000 to cover the estimated costs and
expenses associated with the GalaGen Transaction. The gain from the
consummation of the GalaGen Transaction was $355,373, calculated as
follows:
-8-
<PAGE>
<TABLE>
<S> <C>
Cash $ 71,516
GalaGen Shares Received 498,125
--------------
Total Consideration Received 569,641
Inventory 69,567
Fixed Assets 87,855
Miscellaneous Assets 6,846
Transaction Costs and Expenses 50,000
--------------
Book Value of Assets
and Related Expenses 214,268
--------------
Gain $ 355,373
--------------
--------------
</TABLE>
-9-
<PAGE>
(c) EXHIBITS
<TABLE>
<CAPTION>
Exhibit Method of
No. Description Filing
-------------------------------------------------------------------
<S> <C> <C>
2.1 Asset Purchase Agreement (the "ZEVEX (1)
Agreement") dated as of July 27, 1998
by and between ZEVEX, Inc. and the
Company (incorporated by reference to
Exhibit 2.1 to the Company's Quarterly
Report on Form 10-QSB for the quarter
ended June 30, 1998)
2.2 First Amendment to the ZEVEX Agreement (1)
dated as of December 23, 1998
2.3 Second Amendment to the ZEVEX Agreement (1)
dated as of December 23, 1998
2.4 Asset Purchase Agreement (the "GalaGen (1)
Agreement") dated as of September 1,
1998 by and between GalaGen Inc. and
the Company (incorporated by reference
to Exhibit 2.1 to the Company's
Quarterly Report on Form 10-QSB for the
quarter ended September 30, 1998)
2.5 First Amendment to the GalaGen (1)
Agreement dated as of October 28, 1998
(incorporated by reference to Exhibit B
to the Company's Definitive Proxy
Statement on Schedule 14A filed with
the Securities and Exchange Commission
on December 9, 1998)
2.6 Second Amendment to the GalaGen (1)
Agreement dated as of December 23, 1998
3.1 Second Amended and Restated Articles of (1)
Incorporation of the Company, as
amended
</TABLE>
- ---------------------
(1) Incorporated by reference to the registrant's Current Report on Form 8-K,
for an event which occurred on December 15, 1998.
-10-
<PAGE>
SIGNATURE
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 hereunto duly authorized.
Date: March 3, 1999
NM HOLDINGS, INC.
By: /s/ Richard J. Hegstrand
---------------------------------------------
Richard J. Hegstrand, Chief Operating Officer
-11-
