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Securities and Exchange Commission
Washington, DC 20549
FORM 8-K
Current Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
October 4, 2000
Healthcomp Evaluation Services Corporation
(Exact Name of Registrant as specified in its charter)
Nevada
(State or other jurisdiction of incorporation or organization)
0-28379 88-0395372
(Commission File Number) (I.R.S. Employer Identification Number)
2001 Siesta Drive, Suite 302
Sarasota, Florida 34239
(Address and zip code of principal executive offices)
941-925-2625
(Registrant's telephone number, including area code)
Cautionary Statement Identifying Important Factors
That Could Cause the Company's Actual Results to Differ
From Those Projected in Forward Looking Statements
In connection with the "safe harbor" provisions of the Private
Securities Litigation Reform Act of 1995, readers of this document and
any document incorporated by reference herein, are advised that this
document and documents incorporated by reference into this document
contain both statements of historical facts and forward looking
statements. Forward looking statements are subject to certain risks
and uncertainties which could cause actual results to differ
materially from those indicated by the forward looking statements.
Examples of forward looking statements include, but are not limited to
(i) projections of revenues, income or loss, earnings or loss per
share, capital expenditures, dividends, capital structure and other
financial items, (ii) statements of the plans and objectives of the
Company or its management or Board of Directors, including the
introduction of new products, or estimates or predictions of actions
by customers, suppliers, competitors or regulatory authorities, (iii)
statements of future economic performance and (iv) statements of
assumptions underlying other statements and statements about the
Company or its business.
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Item 2. Acquisition of Assets.
Healthcomp Evaluation Services Corporation ("HESc" or the "Company")
has acquired the Preventive Services Division of U.S. HealthWorks,
Inc., a leading provider of clinic-based occupational health services,
for total consideration of $3.0 million, of which $2.0 million was
paid in cash at closing on September 21, 2000 with the balance to be
paid in quarterly installments over the next twelve months.
Funds used to complete the acquisition were provided under the terms
of a financing arrangement between the Company and Diligenti, Inc.
(see Item 5. "Other Events" below).
The Preventive Services Division ("PSD") provides mobile audiometric
and respiratory testing services, industrial hygiene and safety
consulting and data processing and health evaluation services to a
national client base. HESc specializes in the provision of data
management services for employers' worker populations and furnishes
substance abuse, worksite medical surveillance, and related employee
health, wellness and screening services to corporate and government
clients nationwide. The assets acquired by the Company will be
integrated into the Company's worksite medical surveillance business
to service existing clients of the Company and of PSD.
The companies will also enter into a strategic alliance whereby HESc
will use U.S. HealthWorks' national network of occupational health
clinics for fixed site services and will support on-site occupational
health services to U.S. HealthWorks' customers through the Company's
fleet of mobile testing vehicles.
Item 5. Other Events.
As of September 15, 2000, the Company has entered into a strategic
relationship with Diligenti, a global life sciences group, through its
US subsidiary, Diligenti, Inc. (collectively, "Diligenti").
Pursuant to the terms of an Amended and Restated Loan Agreement, dated
as of October 3, 2000 (the "Loan Agreement"), between the Company and
Diligenti, Inc., Diligenti is expected to invest a total of $5.0
million in Healthcomp Evaluation Services Corporation by year end.
The initial tranche of $3.75 million was loaned to the Company on
September 21, 2000 in exchange for a convertible note; Diligenti has
the option, subject to satisfaction of certain conditions, to make an
additional investment of $1.25 million in HESc's common stock in the
future. The convertible note matures on the earlier of March 31, 2001
or the date that Diligenti converts its note into common stock of the
Company. In the event that the note is not converted, the Company
would pay interest on the note at a rate of 20% per annum. Under the
terms of the financing arrangement, Diligenti may, in accordance with
the terms of the financing arrangement, convert the note at any time
into equity that would represent approximately 38% of the outstanding
voting power of HESc. The combination of those shares of stock
issuable on conversion of the note, together with the shares of stock
issuable in connection with the additional $1.25 million investment
that Diligenti has the option to make, would result in Diligenti
owning shares of common stock representing 51% of HESc's fully diluted
common stock. As part of the transaction, Thomas M. Hartnett, a
Senior Vice President and Chief Financial Officer of the Company, has
resigned from the Board of Directors of HESc, though he has retained
his executive positions, and Neil Stafford and Chris Spanoudakis,
designees of Diligenti, have joined the Board.
The proceeds of the loan from Diligenti have been used to finance the
acquisition of the Preventive Services Division of U.S. HealthWorks,
Inc. (See Item 2. Above) and to repay certain indebtedness and fund
the Company's operations. While this arrangement has helped address
the Company's immediate working capital needs, additional funding is
still required to sustain its operations and the continued growth of
its core business and operations. In addition, the Company is
negotiating with certain debtholders to restructure earlier financings
that are currently in default; however, there can be no assurance that
an acceptable resolution will be achieved.
The Company expects that, in addition to the capital provided by
Diligenti pursuant to the Loan Agreement, the anticipated strategic
relationship with Diligenti and its various trading subsidiaries will
allow the two companies to work closely together to explore new market
opportunities as well as to enhance existing routes to market.
Diligenti has also informed the Company's Board of Directors that,
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subject to satisfaction of the conditions set forth in the Loan
Agreement, it currently expects to convert its note and invest the
remaining $1.25 million in the Company in exchange for 51% of the
Company's fully diluted common stock (the Company's Board of Directors
has indicated its intention to accept Diligenti's investment).
Furthermore, Diligenti and the Company also plan to secure further on-
going working capital as well as acquisition facilities to fund the
Company's projected growth.
Item 7. Financial Statements and Exhibits.
The following financial statements and exhibits are provided herewith:
The audited balance sheets and summaries of operations for the
Preventive Services Division and pro forma financial statements of the
combined operations and balance sheets of the Company and the
Preventive Services Division will be submitted by an amendment to this
filing no later than December 5, 2000.
Exhibit 7.1 Acquisition Agreement by and among Healthcomp Evaluation
Services Corporation, U.S. HealthWorks, Inc. and U.S. HealthWorks
Holding Company, Inc.
Exhibit 7.2 Accounts Receivable Billing and Collection Agreement by
and among Healthcomp Evaluation Services Corporation, U.S.
HealthWorks, Inc. and U.S. HealthWorks Holding Company, Inc.
Exhibit 7.3 Promissory Note issued by Healthcomp Evaluation Services
Corporation to U.S. HealthWorks Holding Company, Inc.
Exhibit 7.4 Covenants Not to Compete between Healthcomp Evaluation
Services Corporation and U.S. HealthWorks, Inc. and between Healthcomp
Evaluation Services Corporation and U.S. HealthWorks Holding Company,
Inc.
Exhibit 7.5 Amended and Restated Loan and Investment Agreement
between Healthcomp Evaluation Services Corporation and Diligenti, Inc.
Exhibit7.6 Security Agreement between Healthcomp Evaluation Services
Corporation and its subsidiaries and Diligenti, Inc.
Exhibit 7.7 Pledge Agreement among Healthcomp Evaluation Services
Corporation, Afton, Inc., Medical Drug Testing, Inc. and Diligenti,
Inc.
Exhibit 7.8 Press releases announcing the Company's financing
arrangement with Diligenti, Inc. and the acquisition of the Preventive
Services Division.
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.
HEALTHCOMP EVALUATION SERVICES CORPORATION
By: /s/ Thomas M. Hartnett
Name: Thomas M. Hartnett
Title: Senior Vice President
Date: October 4, 2000
