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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
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 21, 1998
MEDICAL RESOURCES, INC.
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(Exact name of registrant as specified in its charter)
Delaware 1-12461 13-3584552
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(State of other (Commission File (IRS Employer
jurisdiction of Number) Identification No.)
incorporation)
15 State Street, Hackensack, NJ 07601
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(Address of principal executive offices) Zip Code
Registrant's telephone number, including area code: (201) 488-6230
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Item 5.
On December 21, 1998 and January 15, 1999, respectively, Medical
Resources, Inc. (the "Company") announced the settlement of the class action
litigation pending against the Company and the grant of a hearing before the
Nasdaq Qualifications Hearing Panel relating to the Company's request to move
its stock listing from the Nasdaq National Market to the Nasdaq SmallCap Market.
A copy of the press releases issued by the Company in respect of the foregoing
announcements is attached hereto as Exhibit 99.1 and Exhibit 99.2 and
incorporated herein by reference.
Item 7. Financial Statements and Exhibits
99.1 Press Release, dated December 21, 1998 issued by Medical Resources, Inc.
99.2 Press Release, dated January 15, 1999 issued by Medical Resources, Inc.
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SIGNATURES
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.
MEDICAL RESOURCES, INC.
Dated: January 21, 1999 By: /s/ Christopher J. Joyce
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Name: Christopher J. Joyce
Title: Senior Vice President - Legal
Affairs and Administration
2
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MEDICAL
RESOURCES, INC.
PRESS RELEASE
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Medical Resources, Inc. Announces Agreement-in-Principle
To Settle Class Action Law Suits
HACKENSACK, N.J., Dec. 21 /PRNewswire/ -- Medical Resources, Inc. (Nasdaq: MRII)
today announced that it has reached an agreement-in-principle to settle all of
the consolidated class action lawsuits currently pending against the Company.
Under the terms of the agreement-in-principle, which is subject to approval by
the federal court in the District of New Jersey at a hearing expected to be held
in late February or in March of 1999, the plaintiffs in the class actions will
receive, in full settlement of their claims, $2.75 million in insurance proceeds
and $5.25 million of Convertible Subordinated Notes newly-issued by the Company.
The $5.25 million of Convertible Subordinated Notes will bear interest at the
rate of 8% per annum, will be due on the earlier of August 1, 2005 or when the
Company's presently outstanding Senior Notes are paid in full, and may be
prepaid in cash by the Company at any time after issuance subject to the payment
of a prepayment premium which begins at 8% and decreases over time.
Additionally, the Convertible Subordinated Notes will be convertible into shares
of the Company's Common Stock beginning February 15, 2000 at a price per share
equal to the greater of $3.00 or 120% of the ten day average closing price of
the Company's Common Stock as of the court hearing date.
The agreement-in-principle and the class action settlement contemplated thereby
are further subject to (1) consent to the issuance of the Convertible
Subordinated Notes by the Company's Senior Note lenders and (2) the right of
either the Company or the attorneys representing the class plaintiffs to
terminate the agreement-in-principle if the ten day average closing price of the
Company's Common Stock as of the court hearing date is less than $1.75 per
share.
Medical Resources specializes in the ownership, operation and management of
fixed-site outpatient medical diagnostic imaging centers. The Company operates
more than 90 imaging centers in the U.S. and provides network management
services to managed care organizations in regions where its centers are
concentrated.
* * * * *
Note: This release contains forward-looking statements within the meaning of the
Private Securities Litigation Reform Act of 1995. Investors are cautioned that
forward-looking statements are inherently uncertain. Actual performance and
results may differ materially from
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that projected or suggested herein due to certain risks and uncertainties
including, without limitation: the ability of the Company to effectively
integrate the operations and information systems of businesses acquired in 1997
and earlier; the ability of the Company to generate net positive cash flows from
operations; the payment timing and ultimate collectibility of accounts
receivable (including purchased accounts receivable) from different payer groups
(including Personal Injury type); the economic impact of involuntary share
repurchases and other payments (including price protection payments and penalty
payments) caused by the delay in the effectiveness of the Company's Registration
Statement and by the decline in the Company's share price; the potential
dilution that would result from the conversion of the Company's Series C
Convertible Preferred Stock into common shares at current share prices; the
impact of a changing mix of managed care and personal injury claim business on
contractual allowance provisions, net revenues and bad debt provisions; the
ultimate economic impact of recent litigation including shareholder and former
management lawsuits against the Company and certain of its Directors; the
availability of debt and/or equity capital, on reasonable terms, to finance
operations as needed and to finance growth; and the effects of federal and state
laws and regulations on the Company's business over time. Additional information
concerning certain risks and uncertainties that could cause actual results to
differ materially from that projected or suggested is contained in the Company's
filings with the Securities and Exchange Commission (SEC) over the last 12
months, copies of which are available from the SEC or from the Company upon
request.
CONTACT:
MEDICAL RESOURCES, INC.
Geoffrey A. Whynot
Senior Vice President - Finance and
Chief Financial Officer
201 883-5460
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MEDICAL
RESOURCES, INC.
PRESS RELEASE
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Medical Resources Granted Hearing Before Nasdaq Panel
Hackensack, NJ, January 15, 1999 - Medical Resources, Inc. (NASDAQ: MRII) today
announced that it has been granted a hearing before the Nasdaq Qualifications
Hearing Panel relating to its request to move its stock listing from the Nasdaq
National Market System to the Nasdaq SmallCap Market. The hearing is expected to
occur during the third or fourth week of March, 1999. Until then, the Company's
listing will remain on the Nasdaq National Market System.
The Company previously announced that Nasdaq is reviewing it for continued
listing on the National Market System due to its failure to meet the $5.00
minimum bid price requirement. The Company also previously announced that it
would attempt to move its listing to the Nasdaq SmallCap Market if it were
unable to meet the requirements for continued listing on the National Market
System. Notwithstanding the foregoing and the grant of a hearing, no assurance
can be given that the Company will be successful in maintaining its listing on
the National Market System or in moving its listing to the SmallCap Market.
Medical Resources specializes in the ownership, operation and management of
fixed-site outpatient medical diagnostic imaging centers. The Company operates
more than 90 imaging centers in the U.S. and provides network management
services to managed care organizations in regions where its centers are
concentrated.
* * * * *
Note: This release contains forward-looking statements within the meaning of the
Private Securities Litigation Reform Act of 1995. Investors are cautioned that
forward-looking statements are inherently uncertain. Actual performance and
results may differ materially from that projected or suggested herein due to
certain risks and uncertainties including, without limitation: the ability of
the Company to effectively integrate the operations and information systems of
businesses acquired in 1997 and earlier; the ability of the Company to generate
net positive cash flows from operations; the payment timing and ultimate
collectibility of accounts receivable (including purchased accounts receivable)
from different payer groups (including Personal Injury type); the economic
impact of involuntary share repurchases and other payments (including price
protection payments and penalty payments) caused by the delay in the
effectiveness of the Company's Registration Statement and by the decline in the
Company's share price; the potential dilution that would result from the
conversion of the Company's Series C
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Convertible Preferred Stock into common shares at current share prices; the
impact of a changing mix of managed care and personal injury claim business on
contractual allowance provisions, net revenues and bad debt provisions; the
ability of the Company to meet all of the conditions precedent to final
settlement of the class action litigation against the Company and certain of its
Directors pursuant to the settlement agreement-in-principle entered into last
December; the ultimate economic impact of former management lawsuits against the
Company and certain of its Directors; the availability of debt and/or equity
capital, on reasonable terms, to finance operations as needed and to finance
growth; and the effects of federal and state laws and regulations on the
Company's business over time. Additional information concerning certain risks
and uncertainties that could cause actual results to differ materially from that
projected or suggested is contained in the Company's filings with the Securities
and Exchange Commission (SEC) over the last 12 months, copies of which are
available from the SEC or from the Company upon request.
CONTACT:
MEDICAL RESOURCES, INC.
Geoffrey A. Whynot
Senior Vice President - Finance and
Chief Financial Officer
201 883-5460
2
