<PAGE> 1
SCHEDULE 13D - INFORMATION TO BE INCLUDED IN STATEMENTS
FILED PURSUANT TO RULE 13D-1(A) AND AMENDMENTS
THERETO FILED PURSUANT TO RULE 13D-2(A).*
---------
*As amended by Releases No.34-15457, dated January 4, 1979, effective February
14, 1979 (as corrected by Release No. 34-15457A, dated February 25, 1979)
and No. 34-14384, dated November 29, 1979, effective January 5, 1980. - Editor.
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D
UNDER THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. 1)*
HEALTHWATCH, INC.
- -------------------------------------------------------------------------------
(Name of Issuer)
COMMON STOCK, $.07 PAR VALUE
- -------------------------------------------------------------------------------
(Title of Class of Securities)
422214 60 1
------------------------------
(CUSIP Number)
LARRY FISHER, EXECUTIVE VICE PRESIDENT
HALIS, INC.
9040 ROSWELL ROAD, SUITE 470
ATLANTA, GEORGIA 30350
- -------------------------------------------------------------------------------
(Name, Address and Telephone Number of Person Authorized to Receive Notices
and Communications)
SEPTEMBER 22, 1997
------------------------------------------------------------------------------
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G
to report the acquisition which is the subject of this Schedule 13D, and is
filing this schedule because of Rule 13d-1(b)(3) or (4), check the following box
[ ].
Note: Six copies of this statement, including all exhibits, should be
filed with the Commission. See Rule 13d-1(a) for other parties to whom copies
are to be sent.
* The remainder of this cover page shall be filled out for a reporting
person's initial filing on this form with respect to the subject class of
securities, and for any subsequent amendment containing information which would
alter disclosures provided in a prior cover period.
The information required on the remainder of this cover page shall not
be deemed to be "filed" for the purpose of Section 18 of the Securities and
Exchange Act of 1934 ("Act") or otherwise subject to the liabilities of that
section of the Act but shall be subject to all other provisions of the Act
(however, see the Notes.)
(Continued on following page(s))
Page 1 of 8 Pages
<PAGE> 2
CUSIP No. 422214 60 1 13D Page 2 of 8 Pages
-----------
- -------------------------------------------------------------------------------
1. NAME OF REPORTING PERSON
SS OR IRS IDENTIFICATION NO. OF ABOVE PERSON
HALIS, INC.; IRS EMPLOYER I.D. NO. 58-1366235
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a)[ ]
(b)[ ]
N/A
3. SEC USE ONLY
4. SOURCE OF FUNDS*
WC
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDING IS REQUIRED PURSUANT TO
ITEMS 2(d) or 2(e) [ ]
N/A
6. CITIZENSHIP OR PLACE OF ORGANIZATION
GEORGIA
NUMBER 7. SOLE VOTING POWER
OF SHARES
BENEFICIALLY 416,666
OWNED BY
EACH 8. SHARED VOTING POWER
REPORTING
PERSON -0-
WITH
9. SOLE DISPOSITIVE POWER
416,666
10. SHARED DISPOSITIVE POWER
-0-
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
416,666
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES* [ ]
N/A
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
8.9
14. TYPE OF REPORTING PERSON*
CO
*SEE INSTRUCTIONS BEFORE FILLING OUT!
<PAGE> 3
CUSIP No. 422214 60 1 13D Page 3 of 8 Pages
-----------
- -------------------------------------------------------------------------------
1. NAME OF REPORTING PERSON
SS OR IRS IDENTIFICATION NO. OF ABOVE PERSON
PAUL W. HARRISON
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
N/A
3. SEC USE ONLY
4. SOURCE OF FUNDS*
AF, OO
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDING IS REQUIRED PURSUANT TO
ITEMS 2(d) or 2(e) [ ]
N/A
6. CITIZENSHIP OR PLACE OF ORGANIZATION
UNITED STATES
NUMBER 7. SOLE VOTING POWER
OF SHARES
BENEFICIALLY 416,666
OWNED BY
EACH 8. SHARED VOTING POWER
REPORTING
PERSON -0-
WITH
9. SOLE DISPOSITIVE POWER
416,666
10. SHARED DISPOSITIVE POWER
-0-
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
416,666
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES* [ ]
N/A
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
8.9
14. TYPE OF REPORTING PERSON*
IN
*SEE INSTRUCTIONS BEFORE FILLING OUT!
<PAGE> 4
ITEM 1. SECURITY AND ISSUER.
This filing relates to the acquisition of shares of the common stock,
$.07 par value (the "Common Stock") of HealthWatch, Inc. (the "Issuer") whose
principal executive offices are located at 2445 Cades Way, Vista, California
92083.
ITEM 2. IDENTITY AND BACKGROUND.
(a)-(c) HALIS, Inc. ("HALIS") is a Georgia corporation with its
principal place of business located at 9040 Roswell Road,
Suite 470, Atlanta, Georgia 30350. Paul W. Harrison is the
Chairman and Chief Executive Officer of HALIS. Mr. Harrison's
business address is 9040 Roswell Road, Suite 470, Atlanta,
Georgia 30350. The principal business of HALIS is providing
information technology and services, primarily in the
healthcare industry which business is carried out at its
principal offices.
(e) and (f) During the last five years, neither HALIS, Paul W. Harrison
nor, to the best knowledge of HALIS, any of the persons listed
in Schedule I to this Schedule 13D has been (i) convicted in a
criminal proceeding (excluding traffic violations or similar
misdemeanors) or (ii) a party to a civil proceeding of a
judicial or administrative body of competent jurisdiction and
as a result of such proceeding was or is subject to a
judgment, decree or final order enjoining future violations
of, or prohibiting activities subject to, federal or state
securities laws or finding any violation of such laws.
ITEM 3. SOURCE AND AMOUNT OF FUNDS OTHER CONSIDERATION.
On September 22, 1997, HALIS paid $43,750 for 7,291.66 shares of Series
H Convertible Preferred Stock (the "Preferred Stock"), at a purchase price of
$6.00 per share. The source of the funds paid by HALIS is working capital of
HALIS.
ITEM 4. PURPOSE OF TRANSACTION.
HALIS and HealthWatch, Inc. ("HealthWatch") entered into a Subscription
and Purchase Agreement, dated as of August 20, 1997 (the "Purchase Agreement"),
pursuant to which HALIS agreed to purchase up to 50,000 shares of Series H
Preferred Stock (the "Preferred Stock") of HealthWatch for an aggregate
consideration of up to $300,000, depending on the number of shares of Preferred
Stock HALIS ultimately elects to purchase. A copy of the Purchase Agreement is
attached hereto as Exhibit 4.1.
4
<PAGE> 5
Pursuant to the Purchase Agreement, HALIS has made the following
purchases:
<TABLE>
<CAPTION>
DATE NUMBER OF SHARES PURCHASE PRICE
---- ---------------- --------------
<S> <C> <C>
August 20, 1997 6,250 $ 37,500
September 8, 1997 7,292* 43,750
September 22, 1997 7,292* 43,750
------
$125,000
</TABLE>
* Rounded to the nearest share.
The holders of shares of Preferred Stock have certain preferential
rights with respect to dividends and liquidation, all as more fully set forth in
the Certificate of Designation with respect thereto, attached as Exhibit A to
the Purchase Agreement. In addition, each share of Preferred Stock may be
converted at any time, at the option of the holder thereof, to 20 shares of
common stock ($.07 par value) ("Common Stock") of HealthWatch. The holders of
the Preferred Stock are entitled, with the holders of the Common Stock, voting
as a class, to vote or act by written consent on all matters on which holders of
the Common Stock are entitled to vote, including the election of directors, with
the number of votes per share of Preferred Stock in such matter to be equal to
the number of shares of Common Stock then issuable upon conversion of the
Preferred Stock.
Upon making the September 8, 1997 purchase, HALIS became the beneficial
owner of an aggregate of 270,833 shares of Common Stock, or approximately 6% of
the outstanding Common Stock. HALIS became the beneficial owner of an additional
145,833 shares of Common Stock, or approximately 2.9% of the outstanding Common
Stock, at the time of the September 22, 1997 purchase (for a total of 416,666
shares, or approximately 8.9% of the outstanding Common Stock).
The purpose of the acquisitions by HALIS of the Preferred Stock was (i)
to take an initial step in connection with the possible acquisition by HALIS of
HealthWatch, and (ii) to provide HealthWatch with working capital. HALIS and
HealthWatch entered into a non-binding letter of intent, dated August 8, 1997
(the "Letter of Intent"), providing for the merger of HealthWatch with HALIS. A
copy of the form of Letter of Intent is attached hereto as Exhibit 4.2. Since
the execution of the Letter of Intent by the Companies, HALIS and HealthWatch
have agreed to abandon the proposed merger between the two companies and instead
pursue a joint venture and co-marketing arrangement.
Pursuant to the joint venture and co-marketing arrangement, HALIS
agreed to purchase the Preferred Stock on September 22, 1997 in satisfaction of
its investment obligations (having invested prior to that time $81,250 in
HealthWatch through the August 20, 1997 and September 8, 1997 Preferred Stock
acquisitions). HALIS is not obligated and does not have the present intent to
purchase additional shares of the capital stock of HealthWatch. In return for
HALIS' investment of $125,000, viewed by both companies as demonstrating HALIS'
commitment to
5
<PAGE> 6
the joint venture, HALIS will have use of the HealthWatch facility in California
and access to additional support and distribution resources on the West Coast.
The co-marketing arrangement contemplates shared sales prospects by
HALIS and HealthWatch with a commission or revenue arrangement to be structured.
HealthWatch will provide technology, including the management of digitalized
information from its devices, and an integration database engine for connection
at the point of care. This will provide an automated link to the HALIS
Healthcare Enterprise application system for faster and more accurate
information transfer.
It is believed that this integration of HALIS and HealthWatch
technology products will further the shared vision of both companies, which is
to deliver to the healthcare industry greater efficiency in administrative
transaction processing, and enhanced decision support information at the point
of care.
ITEM 5. INTEREST IN THE SECURITIES OF THE ISSUER.
(a) HALIS is the beneficial owner of 416,666 shares of
Common Stock, or approximately 8.9% of the Common
Stock of HealthWatch. By virtue of his position as
the Chairman of the Board, President and Chief
Executive Officer and beneficial owner of HALIS, Paul
W. Harrison may be deemed for the purposes of this
filing to beneficially own the 416,666 shares of
Common Stock, or approximately 8.9% of the Common
Stock of HealthWatch, Inc., owned by HALIS.
(b) With respect to these shares, HALIS has the sole
power to vote or to direct the vote, and the sole
power to dispose or to direct the disposition, of
416,666 shares of Common Stock. By virtue of his
position as Chairman of the Board, President and
Chief Executive Officer and beneficial owner of
HALIS, Paul W. Harrison has the sole power to vote or
to direct the vote, and the sole power to dispose or
to direct the disposition of the 416,666 shares of
Common Stock.
(c) On August 20, 1997, HALIS became the beneficial owner
of 125,000 shares of Common Stock in exchange for the
payment of $37,500, or a purchase price of $.30 per
share, pursuant to the Purchase Agreement.
(d) Not applicable.
(e) Not applicable.
* Paul W. Harrison, by virtue of his position as the Chairman of
the Board, President and Chief Executive Officer of HALIS and
of his beneficial ownership of approximately 43% of the
outstanding common stock of HALIS, may be
6
<PAGE> 7
deemed to be a beneficial owner of the Preferred Stock
acquired by HALIS. Although, for disclosure purposes, the
416,666 shares of Common Stock owned by HALIS have been
included on rows 7, 9 and 11 on the cover page for Mr.
Harrison, such filing shall not be construed as an admission
that Mr. Harrison is a beneficial owner of such shares.
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH
RESPECT TO SECURITIES OF THE ISSUER.
Paul W. Harrison is the Chairman of the Board, President and
Chief Executive Officer of HALIS. By virtue of his positions
with HALIS, Mr. Harrison has the power to vote or direct the
voting of the shares of HealthWatch owned by HALIS. Aside from
Mr. Harrison's power to vote the HealthWatch shares, there are
no other contracts, arrangements or understandings between
HALIS and Mr. Harrison with respect to the HealthWatch shares.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS*
Exhibit 4.1 Share Subscription and Purchase Agreement
dated August 20, 1997 by and between HALIS,
Inc. and HealthWatch, Inc.
Exhibit 4.2 Form of Letter of Intent by and between
HALIS, Inc. and HealthWatch, Inc.
* Incorporated by this reference to the Schedule 13D filed by
HALIS, Inc. on September 18, 1997.
7
<PAGE> 8
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief,
the undersigned certify that the information set forth in this statement is
true, complete and correct.
Date: October 2, 1997 HALIS, INC.
By: /s/ Paul W. Harrison
-------------------------------------
Paul W. Harrison, President
/s/ Paul W. Harrison
-------------------------------------
Paul W. Harrison
8
<PAGE> 9
SCHEDULE I
INFORMATION RELATING TO
DIRECTORS AND EXECUTIVE OFFICERS OF HALIS, INC.
Item 2. Identity and Background.
The following table sets froth the name, current business address,
present principal occupation or employment, and the principal business address
where such employment is conducted for each director and executive officer of
HALIS, Inc. ("HALIS"). Directors of HALIS are denoted by an asterisk (*)
following their names. Unless otherwise indicated, the current business address
of each officer and director of HALIS is 9040 Roswell Road, Suite 470, Atlanta,
Georgia 30350. Each officer and director of HALIS is a citizen of the United
States of America. Unless otherwise indicated, each occupation set forth
opposite an individual's name refers to employment with HALIS.
Present Principal Occupation or
Name Employment and Current Business Address
===============================================================================
Paul W. Harrison* President and Chief Executive Officer
Larry Fisher* Executive Vice President
Nathan Lipson* Mr. Lipson is currently a private investor and
does not have a business address.
Harold Williams Chief Financial Officer
Trevor Hicks* Mr. Hicks is employed in the position of
Senior Vice President with Networks, Inc. His
principal business address is 2475 North Winds
Parkway, Suite 200, Alpharetta, Georgia 30004.
Charles Broes* Mr. Broes is employed in the position of Chief
Executive Officer with TMR Corp. His principal
business address is 8488 West Hillsborough Avenue,
Suite 201, Tampa, Florida 33615-3806.
<PAGE> 10
Present Principal Occupation or
Name Employment and Current Business Address
===============================================================================
Joe Neely* Senior Vice President of Sales and Marketing
and Chief Operating Officer.
Items 3-6. Additional Required Information.
None of the officers and directors of HALIS have made any investment
in the shares of Preferred Stock to which this filing relates. The purchase by
HALIS of the Preferred Stock has been funded from HALIS' working capital. See
"Item 3. Source and Amount of Funds or Other Consideration." For a discussion of
the purpose of the transaction, see "Item 4. Purpose of Transaction." None of
the officers and directors of HALIS have any interest in the shares of Preferred
Stock apart from Paul W. Harrison by virtue of his positions as Chairman of the
Board, President and Chief Executive Officer and a beneficial owner of HALIS.
See "Item 5. Interest in the Securities of the Issuer." There are no contracts,
arrangements or understandings among any of the officers and directors of HALIS
with respect to any of the shares of Common Stock beneficially owned by HALIS.
See "Item 6. Contracts, Arrangements, Understandings or Relationships with
Respect to Securities of the Issuer" for information relating to Paul W.
Harrison's authority to vote and direct the disposition of the shares of Common
Stock beneficially owned by HALIS by virtue of his positions as Chairman of the
Board, President and Chief Executive Officer of HALIS.
2
