<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON D.C. 20549
FORM 10-K
(Mark one)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the Fiscal Year Ended December 31, 1999
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from __________ to __________
Commission File No.: 1-9156
NEW DIMENSIONS IN MEDICINE, INC.
Filing in Behalf of
NEW DIMENSIONS IN MEDICINE, INC. LIQUIDATING TRUST
(Exact name of registrant as specified in its charter)
DELAWARE 41-6410139
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
45 SOUTH SEVENTH STREET
SUITE 3400
MINNEAPOLIS, MINNESOTA
(Address of principal 55402
executive offices) (Zip Code)
Registrant's telephone number, including area code: (612) 607-7000
Securities registered pursuant to Section 12(b) of the Act: NONE
Securities registered pursuant to Section 12(g) of the Act: NONE
<PAGE>
NEW DIMENSIONS IN MEDICINE, INC. LIQUIDATING TRUST
ANNUAL REPORT TO BENEFICIARIES UNDER COVER OF FORM 10-K
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION METHOD OF FILING
<S> <C> <C>
Report to Beneficiaries of the New Dimensions in Medicine, Inc.
99.1 Liquidating Trust as of December 31, 1999........................ Filed herewith.
99.2 New Dimensions in Medicine, Inc. Liquidating Trust Financial
Statements and Independent Auditor's Report, December 31, 1999 and
1998............................................................. Filed herewith.
</TABLE>
<PAGE>
TO: The Beneficiaries of the NDM Liquidating Trust
FROM: James A. Potter
Liquidating Trustee of the NDM Liquidating Trust
SUBJECT: Final Report to Beneficiaries of the NDM Liquidating Trust as
of December 28, 1999
I INTRODUCTION
On November 14, 1995, the Board of Directors ("Board") of New Dimensions In
Medicine, Inc. ("NDM") approved the Plan of Complete Liquidation and Dissolution
of NDM ("Plan of Liquidation"). The Board appointed James A. Potter to serve as
Liquidating Trustee of the liquidating trust to be formed under the Plan of
Liquidation. On February 22, 1996, the Board approved the execution of the New
Dimensions In Medicine, Inc. Liquidating Trust Agreement ("Trust Agreement").
Terms not otherwise defined herein shall have the meaning ascribed in the Trust
Agreement. Pursuant to the terms of the Trust Agreement, the Liquidating Trustee
is to deliver semi-annual reports to beneficiaries of the NDM Liquidating Trust.
This is the final report that you will receive.
THIS REPORT HAS NOT BEEN REVIEWED BY ANY GOVERNMENTAL AGENCY TO DETERMINE THE
ADEQUACY OR ACCURACY OF INFORMATION CONTAINED HEREIN. HOWEVER, EVERY EFFORT HAS
BEEN MADE TO ENSURE ACCURACY.
II BACKGROUND
On October 18, 1995, the Board approved the sale of most of NDM's assets to
CONMED Corporation ("CONMED"). NDM also entered into an agreement to sell its
international wound care business to Paul Hartmann AG ("Hartmann"). NDM's
shareholders approved the Plan of Liquidation and the sale of assets to CONMED
at a special meeting of shareholders held on February 23, 1996. After
consummating the sales to CONMED and Hartmann on February 23, 1996, NDM ceased
doing business.
On February 17, 1996, the Board approved an Initial Liquidation Distribution to
shareholders of record as of February 23, 1996. The aggregate distribution
totaled $19,119,087.52 or $4.3189 per share. On March 8, 1996, NDM executed the
Trust Agreement and created the NDM Liquidating Trust. The purpose of the NDM
Liquidating Trust is to liquidate the remaining assets of NDM, pay all fixed and
known liabilities of NDM, and distribute any remaining assets to the holders of
the NDM Common Stock of record as of March 12, 1996. On March 7, 1996, the Board
approved a second liquidation distribution ("Second Liquidation Distribution")
of $.1201 per share for an aggregate distribution of $530,768.00.
III FINAL DISTRIBUTION AND TERMINATION OF THE LIQUIDATING TRUST
On October 28, 1999, the Liquidating Trustee mailed a notice of Final
Distribution setting the date of the Final Distribution as December 28, 1999.
The Final Distribution was mailed to all beneficiaries who had surrendered their
stock certificates prior to December 28, 1999. The aggregate Final Distribution
was $1,780,741.20 or $.4134 per unit of beneficial interest. In accordance with
the Liquidating Trust Agreement, the Liquidating Trust terminated on the Final
Distribution Date.
All checks representing the Final Distribution must be cashed on or before April
25, 2000. On April 26, 2000, payment will be stopped on all checks that have not
been cashed and the funds will be held by Shareowner Services, Norwest Bank
Minnesota, N.A. Any funds that remain unclaimed after June 25, 2000, will
escheat to the State of Delaware.
<PAGE>
IV SURRENDER OF NDM COMMON STOCK
As a condition to receiving the Second Liquidation Distribution and the Final
Distribution from the NDM Liquidating Trust, each holder of the common stock of
NDM ("NDM Common Stock") was required to surrender the certificates representing
such stock. If you have not surrendered the certificate representing your NDM
Common Stock, all distributions have been transferred to the State of Delaware
and may be claimed by contacting the Secretary of State for the State of
Delaware.
V SUMMARY OF RECEIPTS AND DISBURSEMENTS
A copy of the trust's audited financial statement is attached.
VI. QUESTIONS REGARDING THE SURRENDER OF THE NDM COMMON STOCK AND
COMMUNICATIONS WITH THE LIQUIDATING TRUSTEE
If you should have questions regarding an unclaimed distribution, please contact
Shareowner Services, Norwest Bank Minnesota, N.A., at (800) 468-9716. Questions
for the Liquidating Trustee should be directed to: Oppenheimer Wolff & Donnelly
LLP, 3300 Plaza VII, 45 South Seventh Street, Minneapolis, Minnesota 55402,
Attention: Mark G. Rabogliatti, Esq. PLEASE NOTE THAT NEITHER THE LIQUIDATING
TRUSTEE NOR ITS COUNSEL CAN GIVE TAX ADVICE.
2
<PAGE>
NEW DIMENSIONS IN MEDICINE, INC.
LIQUIDATING TRUST
FINANCIAL STATEMENTS
AND
INDEPENDENT AUDITOR'S REPORT
DECEMBER 28, 1999 AND DECEMBER 31, 1998
<PAGE>
NEW DIMENSIONS IN MEDICINE, INC. LIQUIDATING TRUST
TABLE OF CONTENTS
DECEMBER 28, 1999 AND DECEMBER 31, 1998
<TABLE>
<S> <C>
REPORT OF LARSON, ALLEN, WEISHAIR & CO., LLP - INDEPENDENT AUDITORS 1
STATEMENTS OF NET ASSETS IN LIQUIDATION 2
STATEMENTS OF CASH RECEIPTS AND DISBURSEMENTS 3
STATEMENTS OF CHANGES IN NET ASSETS IN LIQUIDATION - CASH BASIS 4
STATEMENTS OF CASH FLOWS - CASH BASIS 5
NOTES TO FINANCIAL STATEMENTS 6
</TABLE>
<PAGE>
REPORT OF LARSON, ALLEN, WEISHAIR & CO., LLP
INDEPENDENT AUDITORS
Trustee
New Dimensions in Medicine, Inc. Liquidating Trust
Minneapolis, Minnesota
We have audited the accompanying statements of net assets in liquidation of New
Dimensions in Medicine, Inc. Liquidating Trust (the "Liquidating Trust") as of
December 28, 1999 (termination of trust) and December 31, 1998, and the related
statements of cash receipts and disbursements, changes in net assets in
liquidation, and cash flows - cash basis for the period ended December 28, 1999
(termination of trust) and for the years ended December 31, 1998 and 1997. These
financial statements are the responsibility of the Liquidating Trust's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
As described in Note 2 to the financial statements, the Liquidating Trust's
policy is to prepare its financial statements on the basis of cash receipts and
disbursements, which is a comprehensive basis of accounting other than generally
accepted accounting principles.
In our opinion, the statements referred to above present fairly, in all material
respects, the net assets in liquidation of the Liquidating Trust at December 28,
1999 (termination of trust) and December 31, 1998, and its cash receipts and
disbursements, changes in net assets in liquidation and its cash flows - cash
basis for the period ended December 28, 1999 (termination of trust) and for the
years ended December 31, 1998 and 1997, on the basis of accounting described in
Note 2.
LARSON, ALLEN, WEISHAIR & CO., LLP
Minneapolis, Minnesota
January 31, 2000
(1)
<PAGE>
NEW DIMENSIONS IN MEDICINE, INC. LIQUIDATING TRUST
STATEMENTS OF NET ASSETS IN LIQUIDATION
DECEMBER 28, 1999 (TERMINATION OF TRUST) AND DECEMBER 31, 1998
<TABLE>
<CAPTION>
1999 1998
---------------- -------------
<S> <C> <C>
Cash and Cash Equivalents $ - $ 1,970,766
Cash - Restricted - -
---------------- -------------
Net Assets $ - $ 1,970,766
================ =============
</TABLE>
See accompanying Notes to Financial Statements.
(2)
<PAGE>
NEW DIMENSIONS IN MEDICINE, INC. LIQUIDATING TRUST
STATEMENTS OF CASH RECEIPTS AND DISBURSEMENTS
FOR THE PERIOD ENDED DECEMBER 28, 1999 (TERMINATION OF TRUST) AND
FOR THE YEARS ENDED DECEMBER 31, 1998 AND 1997
<TABLE>
<CAPTION>
1999 1998 1997
------------------ ---------------- ----------------
<S> <C> <C> <C>
CASH RECEIPTS
Interest $ 83,423 $ 143,849 $ 60,064
Proceeds from Sale of Patents - - 35,000
Proceeds from Hartmann Escrow - 600,000 -
Other 15,647 109 -
------------------ ---------------- ----------------
Total Cash Receipts $ 99,070 $ 743,958 $ 95,064
CASH DISBURSEMENTS
General and Administrative Disbursements 289,095 49,237 119,082
------------------ ---------------- ----------------
CASH RECEIPTS IN EXCESS OF (LESS THAN) CASH
DISBURSEMENTS ALLOCABLE TO BENEFICIARIES $ (190,025) $ 694,721 $ (24,018)
================== ================ ================
</TABLE>
See accompanying Notes to Financial Statements.
(3)
<PAGE>
NEW DIMENSIONS IN MEDICINE, INC. LIQUIDATING TRUST
STATEMENTS OF CHANGES IN NET ASSETS IN LIQUIDATION - CASH BASIS
FOR THE PERIOD ENDED DECEMBER 28, 1999 (TERMINATION OF TRUST) AND
FOR THE YEARS ENDED DECEMBER 31, 1998 AND 1997
<TABLE>
<S> <C>
NET ASSETS AT DECEMBER 31, 1996 (PER UNIT: 1996, $.3019) $ 1,300,063
Cash Receipts Less than Cash Disbursements Allocable to
Beneficiaries (Per Unit: 1997, $.0056) (24,018)
-------------------
NET ASSETS AT DECEMBER 31, 1997 (PER UNIT: 1997, $.2963) $ 1,276,045
Cash Receipts in Excess of Cash Disbursements Allocable to
Beneficiaries (Per Unit: 1998, $.1613) 694,721
-------------------
NET ASSETS AT DECEMBER 31, 1998 (PER UNIT: 1998, $.4576) $ 1,970,766
Cash Receipts Less Than Cash Disbursements Allocable to
Beneficiaries (Per Unit: 1999, $.04412) (190,025)
Final Liquidating Distribution (Per Unit 1999, $.4134) (1,780,741)
-------------------
NET ASSETS AT DECEMBER 28, 1999 (PER UNIT: 1999, $.0) $ 0
===================
</TABLE>
See accompanying Notes to Financial Statements.
(4)
<PAGE>
NEW DIMENSIONS IN MEDICINE, INC. LIQUIDATING TRUST
STATEMENTS OF CASH FLOWS - CASH BASIS
FOR THE PERIOD ENDED DECEMBER 28, 1999 (TERMINATION OF TRUST) AND
FOR THE YEARS ENDED DECEMBER 31, 1998 AND 1997
<TABLE>
<CAPTION>
1999 1998 1997
----------------- ---------------- ----------------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Cash Receipts in Excess of (Less than) Cash
Disbursements Allocable to Beneficiaries $ (190,025) $ 694,721 $ (24,018)
----------------- ---------------- ----------------
CASH FLOWS FROM FINANCING ACTIVITIES
Final Liquidating Distribution Paid $ (1,780,741) $ - $ -
----------------- ---------------- ----------------
NET (DECREASE) INCREASE IN CASH AND
CASH EQUIVALENTS $ (1,970,766) $ 694,721 $ (24,018)
Cash and Cash Equivalents - Beginning of Period 1,970,766 1,276,045 1,300,063
----------------- ---------------- ----------------
CASH AND CASH EQUIVALENTS - END OF PERIOD $ 0 $ 1,970,766 $ 1,276,045
================= ================ ================
</TABLE>
See accompanying Notes to Financial Statements.
(5)
<PAGE>
NEW DIMENSIONS IN MEDICINE, INC. LIQUIDATING TRUST
NOTES TO FINANCIAL STATEMENTS
NOTE 1 ORGANIZATION AND BACKGROUND
On November 14, 1995, the Board of Directors (Board) of New
Dimensions In Medicine, Inc. (NDM) approved the Plan of Complete
Liquidation and Dissolution of NDM (Plan of Liquidation).
On March 8, 1996, NDM executed the Trust Agreement and created
NDM Liquidating Trust. The purpose of the NDM Liquidating Trust
is to liquidate the remaining assets of NDM, pay all fixed and
known liabilities of NDM, and distribute any remaining assets to
the holders of the NDM Common Stock of record as of March 12,
1996. On February 17, 1996, the Board approved an Initial
Liquidation Distribution to shareholders of record as of
February 23 1996. The aggregate distribution totaled $19,119,088
or $4.3189 per share. On March 7, 1996, the Board approved a
second liquidation distribution of $.1201 per unit for an
aggregate distribution of $530,768.
The NDM Liquidating Trust was terminated on December 28, 1999
which was the date that all remaining assets in the NDM
Liquidating Trust were liquidated and the proceeds distributed to
the Beneficiaries as provided in the Plan of Liquidation and
Trust Agreement.
NOTE 2 SIGNIFICANT ACCOUNTING POLICIES
BASIS OF PRESENTATION
The financial statements were prepared on the basis of cash
receipts and disbursements. Under this method, cash receipts and
related assets were recognized when received, rather than when
earned, and cash disbursements were recognized when paid, rather
than when the obligation was incurred.
CASH EQUIVALENTS
Cash equivalents in 1998 and 1997 consist of cash invested in a
mutual fund consisting of short-term U.S. Government obligations.
INCOME TAXES
For federal income tax purposes, the transfer of assets and
liabilities to the Liquidating Trust and distribution to the
shareholders of Units of Beneficial Interest in the Liquidating
Trust were treated as a distribution of assets and liabilities by
the Company to its shareholders and a contribution by the
shareholders of such net assets to the Liquidating Trust in
return for Units of Beneficial Interest. The Liquidating Trust is
treated as a grantor trust and not as a corporation. Accordingly,
any receipts or disbursements of the Liquidating Trust is not
taxable to the Liquidating Trust, but is taxable to the Unit
holders as if the Unit holders had themselves realized the
receipts or disbursements from their undivided interests in the
assets of the Liquidating Trust.
(6)
<PAGE>
NOTE 3 CONTINGENT LIABILITIES - RESERVE FUND
Under Delaware law, NDM was required, in connection with its
dissolution, to pay or provide for payment of all known, fixed
and contingent liabilities. Within the liquidation period, NDM
set aside a cash Reserve Fund for payment of all known or
ascertainable liabilities of the Company, including amounts
estimated to be necessary for the payment of estimated expenses,
taxes and contingent liabilities.
If any portion of the Reserve Fund appears to be in excess of
remaining liabilities, distributions to stockholders and/or
interest holders correspondingly would be increased.
Nevertheless, in the event that the amounts set aside in the
Reserve Fund prove to be inadequate to pay NDM's liabilities,
pursuant to Section 282 of the Delaware General Common Law, the
stockholders of NDM may be held personally liable for the payment
of any claim against NDM, but such personal liability by statute
cannot exceed the lesser of the stockholder's pro rata share of
the claim or the amount distributed to such stockholder pursuant
to the Plan of Liquidation. In addition, in the event a court
determines that NDM failed to pay or to make adequate provision
for its liabilities prior to a liquidation distribution, a
creditor of NDM could obtain an injunction delaying or
diminishing the anticipated liquidation to the stockholders
pursuant to the Plan of Liquidation.
NOVAMEDIX LITIGATION
Novamedix Limited (Novamedix) commenced an action against NDM on
June 10, 1994, alleging infringement on several of Novamedix's
patents.
Novamedix and NDM entered into a settlement agreement on or about
March 7, 1996. As a part of the settlement agreement, NDM agreed
to the entry of a consent judgment against the company and
shipped its footpump and consumable inventory to Novamedix in
Texas and paid Novamedix $47,500.
Several days after the parties signed the settlement papers, and
before the inventory was shipped, an NDM employee informed
Novamedix that tests on the footpump slippers indicated that they
did not conform to the specifications filed with the U.S. Food
and Drug Administration (FDA). Subsequently Novamedix moved the
federal court in Ohio for an order enforcing the settlement
agreement by requiring NDM to pay Novamedix $744,300, the alleged
value of the slippers had they complied with the FDA
specifications. Novamedix has based its claim on the Uniform
Commercial Code's (UCC) implied warranties of fitness and
merchantability on the sales of goods.
The Trustee of behalf of NDM has denied that the slippers
constituted consideration for the settlement or that the UCC
applies to the transfer of inventory pursuant to the settlement
of a patent infringement lawsuit. The Trustee has also argued
that the slippers are not valueless, and that Novamedix has no
right to sell the slippers in any event absent obtaining its own
authority from the FDA at which time the differing specifications
would be disclosed and most likely approved.
(7)
<PAGE>
NOTE 3 CONTINGENT LIABILITIES - RESERVE FUND (CONTINUED)
NOVAMEDIX LITIGATION (CONTINUED)
On March 20, 1997, the court denied Novamedix's motion. Novamedix
appealed the decision. The United States Court of Appeals heard
oral agreements on March 6, 1998. On January 28, 1999, the Court
of Appeals affirmed the district court's decision. Novamedix had
14 days from entry of the order in which to seek rehearing or 90
days from entry of the order in which to seek certiorari from the
United States Supreme Court. Novamedix neither sought a rehearing
nor sought certiorari from the U.S. Supreme Court.
TAXES
The Trust may be liable for income taxes which could arise if the
utilization of NDM's net operating loss carryforwards are
disallowed to offset the gains realized by NDM upon the sale of
NDM's assets. This contingency related to these tax liabilities
no longer exist because the statute of limitations has expired.
NOTE 4 HARTMANN ESCROW
In connection with the sale of assets of NDM's International
Wound Care Business, NDM deposited $600,000 into an escrow
account (Hartmann Escrow) to ensure payment of NDM's obligation
to indemnify the buyer (Hartmann) against certain threatened
litigation. The Trustee has the authority to direct investment of
the funds in the Hartmann Escrow, and all income on such funds is
payable to the Trust. Funds in the Escrow Account were released
when a settlement agreement was reached on February 22, 1998 and
distributed to the Trustee. The amount of the distribution, which
included interest, was $664,829.
NOTE 5 LIQUIDATING DISTRIBUTION
As a condition to receiving any distributions under the
Liquidating Trust Agreement, shareholders of NDM surrendered the
instruments representing their NDM common stock to the Trustee.
No distributions subsequent to February 23, 1996 have been or
will be made to any shareholder who has not surrendered their NDM
common stock.
Any future distributions, including the Second Liquidation
Distribution, allocable to a shareholder who has not surrendered
or is not deemed to have surrendered their NDM common stock is
placed in a segregated account for the benefit of such
shareholder. If the holder does not surrender its NDM common
stock within 180 days of the date on which the notice of Final
Distribution is mailed, all distributions allocable to such
shareholder shall be transferred to and deposited with the state
official authorized by the laws of the State of Delaware to
receive the proceeds of such distribution. Such transfer shall
comply in all respects with the laws of the State of Delaware.
The proceeds of such distribution shall thereafter be held solely
for the benefit of and for the ultimate distribution to such
shareholder as the sole equitable owner thereof and shall escheat
to the State of Delaware or be treated as abandoned property in
accordance with the laws of the State of Delaware. In no event
shall the proceeds of any such distribution revert to or become
the property of
(8)
<PAGE>
the NDM Trust Estate. At December 28, 1999, December 31, 1998 and
1997, 14,217, 14,302 and 15,075 shares of NDM common stock had
not been surrendered to the Trustee, respectively.
(9)
<PAGE>
NOTE 5 LIQUIDATING DISTRIBUTION (CONTINUED)
Initial distribution prior to formation of Trust:
<TABLE>
<CAPTION>
Distribution
Record Date Payment Date Per Unit Amount
----------- ---------------- ------------ --------------
<S> <C> <C> <C>
February 23, 1996 February 23, 1996 4.3189 $ 19,119,088
==============
Liquidating and the final distribution have been paid as follows:
Distribution
Record Date Payment Date Per Unit Amount
----------- ---------------- ------------ ---------------
<S> <C> <C> <C>
March 7, 1996 April 16, 1996 0.1232 $ 530,768
===============
October 28, 1999 December 28, 1999 0.4135 $ 1,780,741
===============
</TABLE>
NOTE 6 PATENTS
The Liquidating Trust has right to various patents which were
obtained by NDM. The value, if any, of such patents has not been
determined and no value was included as a Trust Asset at December
31, 1996.
During 1997, the Liquidating Trust entered into an agreement to
sell certain patents to another company. The sale price was
$35,000 was received and is recorded in income.
(10)
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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.
Dated: March 27, 2000 NEW DIMENSIONS IN MEDICINE, INC.
LIQUIDATING TRUST
By /s/ James A. Potter
----------------------------
James A. Potter
TRUSTEE
