<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-KA
CURRENT REPORT PURSUANT TO SECTION 13 OR 15 (d) OF
THE SECURITIES ACT OF 1934
DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED): MARCH 17, 1998
REHABILICARE INC.
- -------------------------------------------------------------------------------
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
MINNESOTA 0-9407 41-0985318
- -------------------------------------------------------------------------------
(STATE OR OTHER (COMMISSION FILE (I.R.S.EMPLOYER
JURISDICTION OF NUMBER) IDENTIFICATION NO.)
INCORPORATION)
1811 OLD HIGHWAY EIGHT, NEW BRIGHTON, MN 55112-3493
- -------------------------------------------------------------------------------
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (612) 631-0590
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
(FORMER NAME OR ADDRESS, IF CHANGED SINCE LAST REPORT.)
<PAGE>
Item 2. ACQUISITION OR DISPOSITION OF ASSETS
On March 17, 1998, Rehabilicare Inc. (the "Company") completed its
acquisition of Staodyn, Inc. ("Staodyn") in accordance with the terms of an
Agreement and Plan of Merger dated as of December 1, 1997. Pursuant to the
terms of such Agreement, Hippocrates Acquisition, Inc., a wholly owned
subsidiary of the Company ("Subsidiary"), was merged (the "Merger") with and
into Staodyn, whereupon the separate existence of Subsidiary was terminated
and Staodyn continued as the surviving corporation. In the Merger,
Rehabilicare issued 5,521,111 shares of its common stock, constituting .829
shares of its common stock for each share of Staodyn outstanding immediately
before the Merger and for which holders of Staodyn common stock did not
assert dissenters rights, and paid cash in lieu of 599.23 fractional shares.
Holders of a total of 500 shares of common stock of Staodyn asserted
dissenters rights. As a result of the Merger Staodyn became a wholly owned
subsidiary of Rehabilicare.
Item 7. FINANCIAL STATEMENTS AND EXHIBITS
(a) FINANCIAL STATEMENTS OF STAODYN, INC.
The following financial statements, which are included in Staodyn's Annual
Report on Form 10-KSB for the year ended November 30, 1997, are hereby
incorporated into this Form 8-K by reference:
Consolidated Balance Sheets as of November 30, 1997 and November 30,
1996
Consolidated Statements of Operations for the years ended
November 30, 1997 and November 30, 1996
Consolidated Statement of Changes in Stockholders' Equity for
the years ended November 30, 1997 and November 30, 1996
Statements of Cash Flows for the years ended November 30, 1997
and November 30, 1996
Notes to Financial Statements
Report of Independent Accountants of Price Waterhouse LLP
(b) PRO FORMA FINANCIAL INFORMATION
The following pro forma financial statements, which are included on pages
F-26 through F-33 in Amendment No. 1 to Rehabilicare's Registration
Statement on Form S-4 filed with the Commission on February 10, 1998
(File no. 333-44139) are hereby incorporated by reference:
Unaudited Pro Forma Condensed Combined Balance Sheet at September 30, 1997
Unaudited Pro Forma Condensed Combined Statement of Income for the:
Three months ended September 30, 1997
Three months ended September 30, 1996
Year ended June 30, 1997
Year ended June 30, 1996
Year ended June 30, 1995
<PAGE>
Notes to Unaudited Pro Forma Condensed Combined Financial Information
The following financial statements are attached immediately after the
signature page to this Form 8-KA:
Unaudited pro forma condensed combined balance sheet as of March 31, 1998
Unaudited pro forma combined statements of income for the three and nine
month periods ending March 31, 1997 and March 31, 1998
(c) Exhibits
*Exhibit 2.1 Agreement and Plan of Merger, dated as of December 1, 1997 by and
among Rehabilicare Inc. Hippocrates Acquisition, Inc. and Staodyn,
Inc. (incorporated by reference to Exhibit A to the Proxy
Statement/Prospectus that forms a part of Amendment No.1 to the
Registration Statement on Form S-4 filed by the Company on
February 10, 1998 (File no. 333-44139)).
*Exhibit 23.1 Consent of Price Waterhouse LLP
______________
*Previously filed
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of
1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned hereunto duly authorized.
REHABILICARE INC.
By /s/ DAVID B. KAYSEN
--------------------
David B. Kaysen
Chief Executive Officer and
President
Dated: May 16, 1998
<PAGE>
MERGER OF REHABILICARE AND STAODYN
UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF INCOME
FOR THE NINE MONTHS ENDED MARCH 31, 1998
<TABLE>
<CAPTION>
PRO FORMA PRO FORMA
REHABILICARE STAODYN ADJUSTMENTS COMBINED
------------ ------------- ------------ --------------
<S> <C> <C> <C> <C>
Net sales and rental revenue $ 9,128,595 $ 16,121,751 $ $ 25,250,346
Cost of sales 2,473,349 6,220,942 8,694,291
------------ ------------- ------------ --------------
Gross profit 6,655,246 9,900,809 16,556,055
Operating expenses:
Selling, general and administration $ 5,542,056 $ 9,469,863 $ 15,011,919
Research and development 399,354 344,442 743,796
Merger expenses 640,618 2,535,328 3,175,996
------------ ------------- ------------ --------------
Total operating expenses 6,582,028 12,349,683 18,931,711
Income (loss) from operations 73,218 (2,448,874) (2,375,656)
Other income (expense):
Interest income (expense) (226,824) (182,882) (409,706)
Other income (expense) 10,561 85,227 95,788
------------ ------------- ------------ --------------
Income (loss) before taxes (143,045) (2,546,529) (2,689,574)
Provision (benefit) for income taxes ---- (1,595,169) (1,595,169)
------------ ------------- ------------ --------------
Net (loss) income $ (143,045) $ (951,360) $ $ (1,094,405)
------------ ------------- ------------ --------------
------------ ------------- ------------ --------------
Earnings per share data:
Net (loss) income per share $ (0.03) $ (0.14) $ $ (0.10)
------------ ------------- ------------ --------------
------------ ------------- ------------ --------------
Weighted average common and
common equivalent shares
outstanding 4,954,019 6,661,187 10,405,939
------------ ------------- ------------ --------------
------------ ------------- ------------ --------------
</TABLE>
See Notes to Unaudited Pro Forma Condensed Combined Financial Statements
<PAGE>
MERGER OF REHABILICARE AND STAODYN
UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF INCOME
FOR THE THREE MONTHS ENDED MARCH 31, 1998
<TABLE>
<CAPTION>
PRO FORMA PRO FORMA
REHABILICARE STAODYN ADJUSTMENTS COMBINED
------------ ------- ----------- --------
<S> <C> <C> <C> <C>
Net sales and rental revenue $ 3,096,589 $ 5,308,719 $ 8,405,308
Cost of sales 868,606 2,510,322 3,378,928
------------- ------------- ----------- -------------
Gross profit 2,227,983 2,798,397 5,026,380
Operating expenses:
Selling, general and administration $ 1,966,261 $ 3,066,835 $ 5,033,096
Research and development 152,050 111,054 263,104
Merger expenses 640,618 2,535,378 3,175,996
------------- ------------- ----------- -------------
Total operating expenses 2,758,929 5,713,267 8,472,196
Income (loss) from operations (530,946) (2,914,870) (3,445,816)
Other income (expense):
Interest income (expense) (131,114) (46,260) (177,374)
Other income (expense) 3,463 30,885 34,348
------------- ------------- ----------- -------------
Income (loss) before taxes (658,597) (2,930,245) (3,588,842)
Provision (benefit) for income taxes (174,000) (1,595,169) (1,769,169)
------------- ------------- ----------- -------------
Net (loss) income $ (484,597) $ (1,335,076) $ (1,819,673)
------------- ------------- ----------- -------------
------------- ------------- ----------- -------------
Earnings per share data:
Net (loss) income per share $ (0.10) $ (0.20) $ (0.17)
------------- ------------- ----------- -------------
------------- ------------- ----------- -------------
Weighted average common and
common equivalent shares
outstanding 4,948,926 6,658,477 10,406,258
------------- ------------- ----------- -------------
------------- ------------- ----------- -------------
</TABLE>
See Notes to Unaudited Pro Forma Condensed Combined Financial Statements
<PAGE>
MERGER OF REHABILICARE AND STAODYN
UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF INCOME
FOR THE NINE MONTHS ENDED MARCH 31, 1997
<TABLE>
<CAPTION>
PRO FORMA PRO FORMA
REHABILICARE STAODYN ADJUSTMENTS COMBINED
------------ ------- ----------- --------
<S> <C> <C> <C> <C>
Net sales and rental revenue $ 7,881,045 $ 15,699,741 $ 23,580,786
Cost of sales 2,108,707 5,603,711 7,712,418
------------- ------------- ----------- -------------
Gross profit 5,772,338 10,096,030 15,868,368
Operating expenses:
Selling, general and administration $ 4,556,125 $ 9,448,536 $ 14,004,661
Research and development 394,405 343,817 738,222
------------- ------------- ----------- -------------
Total operating expenses 4,950,530 9,792,353 14,742,883
Income from operations 821,808 303,677 1,125,485
Other income (expense):
Interest income (expense) (195,917) (118,002) (313,919)
Other income (expense) 40,680 77,349 118,029
------------- ------------- ----------- -------------
Income before taxes 666,571 263,024 929,595
Provision for income taxes 229,000 ---- 229,000
------------- ------------- ----------- -------------
Net income $ 437,571 $ 263,024 $ 700,595
------------- ------------- ----------- -------------
------------- ------------- ----------- -------------
Earnings per share data:
Net income per share $ 0.09 $ 0.04 $ 0.07
------------- ------------- ----------- -------------
------------- ------------- ----------- -------------
Weighted average common and
common equivalent shares
outstanding 4,871,485 6,644,587 10,510,833
------------- ------------- ----------- -------------
------------- ------------- ----------- -------------
</TABLE>
See Notes to Unaudited Pro Forma Condensed Combined Financial Statements
<PAGE>
MERGER OF REHABILICARE AND STAODYN
UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF INCOME
FOR THE THREE MONTHS ENDED MARCH 31, 1997
<TABLE>
<CAPTION>
PRO FORMA PRO FORMA
REHABILICARE STAODYN ADJUSTMENTS COMBINED
------------ ------- -------------- --------------
<S> <C> <C> <C> <C>
Net sales and rental revenue $ 2,783,290 $ 5,278,192 $ 8,061,482
Cost of sales 765,766 1,847,156 2,612,922
-------------- -------------- ------------- --------------
Gross profit 2,017,524 3,431,036 5,448,560
Operating expenses:
Selling, general and administration $ 1,645,530 $ 3,184,390 $ 4,829,920
Research and development 139,384 119,232 258,616
-------------- -------------- ------------- --------------
Total operating expenses 1,784,914 3,303,622 5,088,536
Income from operations 232,610 127,414 360,024
Other income (expense):
Interest income (expense) (57,634) (37,752) (95,386)
Other income (expense) 17,285 23,759 41,044
-------------- -------------- ------------- --------------
Income before taxes 192,261 113,421 305,682
Provision for income taxes 63,000 ---- 63,000
-------------- -------------- ------------- --------------
Net income $ 129,261 $ 113,421 $ 242,682
-------------- -------------- ------------- --------------
-------------- -------------- ------------- --------------
Earnings per share data:
Net income per share $ 0.03 $ 0.02 $ 0.02
-------------- -------------- ------------- --------------
-------------- -------------- ------------- --------------
Weighted average common and
common equivalent shares
outstanding 4,858,877 6,519,882 10,498,225
-------------- -------------- ------------- --------------
-------------- -------------- ------------- --------------
</TABLE>
See Notes to Unaudited Pro Forma Condensed Combined Financial Statements
<PAGE>
MERGER OF REHABILICARE AND STAODYN
UNAUDITED PRO FORMA CONDENSED COMBINED BALANCE SHEET AS OF MARCH 31, 1998
<TABLE>
<CAPTION>
Pro Forma Pro Forma
Rehabilicare Staodyn Adjustments Combined
------------ ------- ----------- --------
<S> <C> <C> <C> <C>
ASSETS
Current Assets:
Cash and cash equivalents $ (69,040) $ 2,573,829 $ 2,504,789
Receivables, net 6,400,876 5,692,457 12,093,333
Inventories 2,615,231 3,717,817 6,333,048
Deferred income tax benefit 575,000 2,056,988 2,631,988
Prepaid expenses 112,291 122,454 234,745
-------------- -------------- ------------ --------------
Total current assets 9,634,358 14,163,545 23,797,903
Property and equipment, net 2,217,864 1,131,027 3,348,891
Intangible assets 26,779 613,200 639,979
Long-term deferred taxes 362,945 362,945
Other assets 28,125 11,140 39,265
-------------- -------------- ------------ --------------
$ 11,907,126 $ 16,281,857 $ 28,188,983
-------------- -------------- ------------ --------------
-------------- -------------- ------------ --------------
LIABILITIES AND STOCKHOLDERS'
EQUITY
Current liabilities:
Note payable $ 470,000 $ 470,000
Current maturities of long-term debt 293,332 101,027 394,359
Accounts payable 862,320 560,932 1,423,252
Accrued liabilities 741,160 1,733,203 2,474,363
-------------- -------------- ------------ --------------
Total current liabilities 2,366,812 2,395,162 4,761,974
Long-term debt 1,736,029 1,674,007 3,410,036
Commitments and contingencies
Stockholders' equity:
Common stock 488,548 67,352 484,759 1,040,659
Additional paid-in capital 5,604,181 15,571,963 (594,075) 20,582,069
Less note receivable from
officer/stockholder (162,500) (162,500)
Retained earnings 1,874,056 (3,317,311) (1,443,255)
Less treasury stock (at cost) (109,316) 109,316 ----
-------------- -------------- ------------ --------------
Total stockholders' equity $ 7,804,265 $ 12,212,688 0 $ 20,016,973
-------------- -------------- ------------ --------------
$ 11,907,126 $ 16,281,857 $ 28,188,983
-------------- -------------- ------------ --------------
-------------- -------------- ------------ --------------
</TABLE>
See Notes to Unaudited Pro Forma Condensed Combined Financial Statements
