OMB APPROVAL
-------------------------
OMB Number: 3235-0145
Expires:
Estimated average burden
hours per form......14.90
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. _________)*
HEALTHWATCH, INC.
--------------------------------------------------------------------------------
(Name of Issuer)
Common Stock, par value $.05 per share
--------------------------------------------------------------------------------
(Title of Class of Securities)
--------------------------------------------------------------------------------
(CUSIP Number)
Joseph P. Wynne
Commonwealth Associates, L.P.
830 Third Avenue
New York, New York 10022
(212) 829-5839
--------------------------------------------------------------------------------
(Name, Address and Telephone Number of Person Authorized to Receive
Notices and Communications)
May 8, 2000
-------------------------------------------------------------------------
(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 |_|.
Check the following box if a fee is being paid with the statement |_|. (A fee is
not required only if the reporting person: (1) has a previous statement on file
reporting beneficial ownership of more than five percent of the class of
securities described in Item 1; and (2) has filed no amendment subsequent
thereto reporting beneficial ownership of five percent or less of such class.)
(See Rule 13d-7.)
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 page.
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 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).
<PAGE>
CUSIP No. SCHEDULE 13D Page 2 of 14 Pages
--------------------------------------------------------------------------------
1 NAMES OF REPORTING PERSONS
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
Commonwealth Associates, L.P. (13-3467952)
--------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) |_|
(b) |_|
--------------------------------------------------------------------------------
3 SEC USE ONLY
--------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
WC
--------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEM 2(d) or 2(e) |_|
--------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
New York
--------------------------------------------------------------------------------
7 SOLE VOTING POWER
--------------------------------------------------------
NUMBER OF 8 SHARED VOTING POWER
SHARES
BENEFICIALLY 295,535
OWNED BY --------------------------------------------------------
EACH 9 SOLE DISPOSITIVE POWER
REPORTING
PERSON
WITH --------------------------------------------------------
10 SHARED DISPOSITIVE POWER
295,535
--------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
295,535
--------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES* |_|
--------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
12.1%
--------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
PN
--------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION.
<PAGE>
CUSIP No. SCHEDULE 13D Page 3 of 14 Pages
--------------------------------------------------------------------------------
1 NAMES OF REPORTING PERSONS
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
Commonwealth Associates Management Corp. (13-3468747)
--------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) |_|
(b) |_|
--------------------------------------------------------------------------------
3 SEC USE ONLY
--------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
WC
--------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEM 2(d) or 2(e) |_|
--------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
New York
--------------------------------------------------------------------------------
7 SOLE VOTING POWER
--------------------------------------------------------
NUMBER OF 8 SHARED VOTING POWER
SHARES
BENEFICIALLY 295,535
OWNED BY --------------------------------------------------------
EACH 9 SOLE DISPOSITIVE POWER
REPORTING
PERSON
WITH --------------------------------------------------------
10 SHARED DISPOSITIVE POWER
295,535
--------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
295,535
--------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES* |_|
--------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
12.1%
--------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
CO
--------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION.
<PAGE>
CUSIP No. SCHEDULE 13D Page 4 of 14 Pages
--------------------------------------------------------------------------------
1 NAMES OF REPORTING PERSONS
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
ComVest Capital Partners LLC (13-4068973)
--------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) |_|
(b) |_|
--------------------------------------------------------------------------------
3 SEC USE ONLY
--------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
WC
--------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEM 2(d) or 2(e) |_|
--------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
--------------------------------------------------------------------------------
7 SOLE VOTING POWER
None
--------------------------------------------------------
NUMBER OF 8 SHARED VOTING POWER
SHARES
BENEFICIALLY 1,484,000
OWNED BY --------------------------------------------------------
EACH 9 SOLE DISPOSITIVE POWER
REPORTING
PERSON None
WITH --------------------------------------------------------
10 SHARED DISPOSITIVE POWER
1,484,000
--------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
1,484,000
--------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES* |_|
--------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
40.9%
--------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
OO
--------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION.
<PAGE>
CUSIP No. SCHEDULE 13D Page 5 of 14 Pages
--------------------------------------------------------------------------------
1 NAMES OF REPORTING PERSONS
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
Michael S. Falk
--------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) |_|
(b) |_|
--------------------------------------------------------------------------------
3 SEC USE ONLY
--------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
PF
--------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEM 2(d) or 2(e) |_|
--------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
USA
--------------------------------------------------------------------------------
7 SOLE VOTING POWER
399,108
--------------------------------------------------------
NUMBER OF 8 SHARED VOTING POWER
SHARES
BENEFICIALLY 1,779,535
OWNED BY --------------------------------------------------------
EACH 9 SOLE DISPOSITIVE POWER
REPORTING
PERSON 399,108
WITH --------------------------------------------------------
10 SHARED DISPOSITIVE POWER
1,779,535
--------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
2,178,643
--------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES* |_|
--------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
50.4%
--------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
IN
--------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION.
<PAGE>
CUSIP No. SCHEDULE 13D Page 6 of 14 Pages
--------------------------------------------------------------------------------
1 NAMES OF REPORTING PERSONS
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
Robert Priddy
--------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) |_|
(b) |_|
--------------------------------------------------------------------------------
3 SEC USE ONLY
--------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
PF
--------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEM 2(d) or 2(e) |_|
--------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
USA
--------------------------------------------------------------------------------
7 SOLE VOTING POWER
357,144
--------------------------------------------------------
NUMBER OF 8 SHARED VOTING POWER
SHARES
BENEFICIALLY
OWNED BY --------------------------------------------------------
EACH 9 SOLE DISPOSITIVE POWER
REPORTING
PERSON 357,144
WITH --------------------------------------------------------
10 SHARED DISPOSITIVE POWER
--------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
357,144
--------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES* |_|
--------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
14.3%
--------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
IN
--------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION.
<PAGE>
Page 7 of Pages 14
Item 1. Security and Issuer.
This statement relates to the common stock, par value $.05 per share
("Common Stock") of HealthWatch, Inc. (the "Issuer"). The address of the
Issuer's principal executive office is 3525 Piedmont Road, 7 Piedmont Center,
Suite 300, Atlanta, Georgia 30305.
The shares of Common Stock that are the subject of this statement either
are issuable (i) upon conversion of the Issuer's Series C 8% Convertible
Preferred Stock ("C Preferred Stock") issued to investors in the December
Placement (defined in Item 3 below), (ii) upon exercise of currently exercisable
five-year warrants issued to investors in the December Placement which have an
exercise price of $1.875 per share (the "December Warrants"), (iii) upon
exercise of currently exercisable five-year warrants issued to ComVest Capital
Partners, LLC which have an exercise price of $3.50 per share (the "ComVest
Warrant"), (iv) upon conversion of the Issuer's Series D 8% Convertible
Preferred Stock ("D Preferred Stock) issued to investors in the May Placement
(defined in Item 3 below) which have a conversion price of $3.50 per share, (v)
upon exercise of currently exercisable five-year warrants issued to investors in
the May Placement which have an exercise price of $3.50 per share (the "May
Warrants"), and (vi) upon exercise or conversion of additional shares of D
Preferred Stock and May Warrants, which May Warrants and D Preferred Stock are
the subject of currently exercisable five-year warrants granted in consideration
of services in connection with the May Placement (the "Agents Warrants"). The
foregoing exercise prices are subject to adjustment in certain circumstances.
Item 2. Identity and Background.
This statement is filed jointly by Commonwealth Associates, L.P.
("Commonwealth"), a limited partnership organized under the laws of the New
York, whose principal business is investment banking and advisory services,
Commonwealth Associates Management Corp. ("CAMC"), a corporation organized under
the laws of New York and the corporate general partner of Commonwealth, ComVest
Capital Partners, LLC ("ComVest"), a limited liability company organized under
the laws of Delaware whose principal business is investing in and administering
ownership of securities, Michael S. Falk and Robert Priddy. Commonwealth, CAMC,
ComVest, Mr. Falk and Mr. Priddy are the "Reporting Persons."
Robert Priddy, Keith Rosenbloom and Basil Ascuitto are directors, and Mr.
Falk is Chairman, of CAMC. Messrs. Falk, Priddy and Rosenbloom are the managers
of ComVest. Mr. Falk is also the controlling equity owner of both CAMC and
ComVest. The sole officer of CAMC is Joseph Wynne, Chief Financial Officer.
All of the individual Reporting Persons and other individuals identified
in this Item 2 are United States citizens. The business address for all of the
Reporting Persons and other individuals identified in this Item 2, other than
Mr. Priddy, is 830 Third Avenue, New York, New York 10022.
<PAGE>
Page 8 of Pages 14
Mr. Priddy is a principal of RMC Capital, 1640 Powers Ferry, Suite 125,
Marietta, Georgia 30067, an investment firm.
During the last five years, none of the Reporting Persons or any of the
other individuals identified in this Item 2 has been convicted in a criminal
proceeding (excluding traffic violations and similar misdemeanors) or been 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
or mandating activities subject to, federal or state securities laws of finding
any violation with respect to such laws.
Item 3. Source and Amount of Funds or Other Consideration.
On December 23, 1999, the Issuer sold units (the "December Units"), each
unit consisting of 1,000 shares of C Preferred Stock and December Warrants to
purchase 166,667 shares of Common Stock, in a private placement (the "December
Placement"). Each share of C Preferred Stock is convertible into 5.33 shares of
Common Stock at the holder's option and on the occurrence of specified events.
The December Units were purchased by ComVest and Mr. Falk as investors in the
December Placement for an aggregate purchase price of $320,000. ComVest's funds
were provided by its working capital. Mr. Falk's funds were provided by his
personal funds.
In February 2000, ComVest entered into a commitment letter with the Issuer
pursuant to which it agreed to make available to the Issuer up to $2,000,000 in
loans. In consideration of entering into such commitment letter, the Issuer
granted ComVest the ComVest Warrant.
On May 8, 2000, the Issuer sold units the "May Units"), each unit
consisting of 1,000 shares of D Preferred Stock and May Warrants to purchase
7,143 shares of Common Stock, in a private placement (the "May Placement"). Each
share of D Preferred Stock is convertible into 28.57 shares of Common Stock at
the holder's option and on the occurrence of specified events. Commonwealth
acted as placement agent to the Issuer in connection with the Private Placement
pursuant to an Amended and Restated Agency Agreement dated as of February 8,
2000, with the Issuer (the "Agency Agreement"). The May Units were purchased by
Messrs. Falk and Priddy as investors in the May Placement for an aggregate
purchase price of $1,200,000. The funds were provided by their respective
personal funds.
The Agents Warrants were originally obtained by Commonwealth as
compensation for services rendered to the Issuer in connection with the May
Placement. Certain of the Agents Warrants were distributed by Commonwealth to
certain of its employees, including Mr. Falk. The Reporting Persons currently
hold Agent Warrants representing, upon the ultimate conversion and exercise of
the underlying D Preferred Stock and May Warrants, the right to acquire 403,215
shares of Common Stock. Commonwealth disclaims beneficial ownership of the
Agents Warrants it distributed to other persons, including the Reporting
Persons.
<PAGE>
Page 9 of Pages 14
In no case were any funds borrowed by any of the Reporting Persons in
connection with the above transactions.
Item 4. Purpose of Transaction.
The Agents Warrants and the ComVest Warrant were acquired by the Reporting
Persons as compensation for services rendered to the Issuer solely for
investment purposes and not for the purpose of acquiring control of the Issuer.
The C Preferred Stock, D Preferred Stock, December Warrants and May Warrants
were acquired to make a profitable investment.
Pursuant to the Agency Agreement, Commonwealth was granted the right to
designate one of the seven directors of the Issuer. Such designee was appointed
to the Issuer's board of directors on April 5, 2000.
Other than as set forth above, the Reporting Persons have no present plans
or proposals which relate to, or could result in, any of the matters referred to
in paragraphs (a) through (j) of Item 4 of Schedule 13D. The Reporting Persons
may, at any time and from time to time, renew or reconsider their position and
formulate plans or proposals with respect thereto, but have no present intention
of doing so.
Item 5. Interest in Securities of the Issuer.
(a)(1) Commonwealth may be deemed to be the beneficial owner of an
aggregate of 295,535 shares of Common Stock, representing approximately 12.1% of
the issued and outstanding shares of Common Stock of the Issuer, which are
issuable upon the exercise and conversion of the D Preferred Stock and May
Warrants underlying the Agents Warrants.
(a)(2) CAMC, as the general partner of Commonwealth, may be deemed to
beneficially own the 295,535 shares of Common Stock, representing approximately
12.1% of the issued and outstanding shares of Common Stock of the Issuer,
beneficially owned by Commonwealth.
(a)(3) ComVest may be deemed to be the beneficial owner of an aggregate of
1,484,000 shares of Common Stock, representing approximately 40.9% of the issued
and outstanding shares of Common Stock of the Issuer, which represents the right
to acquire (i) 117,333 shares of Common Stock upon conversion of the C Preferred
Stock, (ii) 366,667 shares of Common Stock upon exercise of the December
Warrants, and (iii) 1,000,000 shares of Common Stock upon exercise of the
ComVest Warrant.
(a)(4)Mr. Falk may be deemed to be the beneficial owner of an aggregate of
2,178,643 shares of Common Stock, representing approximately 50.4% of the issued
and outstanding shares of Common Stock of the Issuer. In addition to the 295,535
and 1,484,000 shares beneficially owned respectively by Commonwealth and
ComVest, which Mr. Falk may be deemed to beneficially own,
<PAGE>
Page 10 of Pages 14
Falk may be deemed to beneficially own an additional 399,108 shares of Common
Stock, representing the right to acquire (i) 107,680 shares of Common Stock
issuable upon the exercise and conversion of the D Preferred Stock and May
Warrants underlying the Agents Warrants (distributed to him by Commonwealth),
(ii) 533,333 shares of Common Stock upon the conversion of the C Preferred
Stock, (iii) 166,667 shares of Common Stock upon exercise of the December
Warrants, (iv) 57,142 shares of Common Stock upon conversion of the D Preferred
Stock and (v) 14,286 shares of Common Stock upon exercise of the May Warrants.
In his capacity as (i) Chairman and controlling equity owner of CAMC and (ii)
manager and principal member of ComVest, Mr. Falk shares indirect voting and
dispositive power with respect to such entities' shares and may therefore be
deemed to be the beneficial owner of such securities.
(a)(5) Mr. Priddy may be deemed to be the beneficial owner of an aggregate
of 357,144 shares of Common Stock, representing approximately 14.3% of the
issued and outstanding shares of Common Stock of the Issuer, which represents
the right to acquire 285,714 shares of Common Stock upon the conversion of the D
Preferred Stock and 71,430 shares of Common Stock upon exercise of the May
Warrants.
(a)(6) Mr. Rosenbloom may be deemed to be the beneficial owner of an
aggregate of 50,756 shares of Common Stock, representing approximately 2.3% of
the issued and outstanding shares of Common Stock of the Issuer, which
represents the right to acquire 9,333 shares of Common Stock upon the conversion
of the C Preferred Stock, 29,167 shares of Common Stock upon exercise of the
December and 12,256 shares of Common Stock issuable upon the exercise and
conversion of the D Preferred Stock and May Warrants underlying the Agents
Warrants (distributed to him by Commonwealth).
(a)(7) Mr. Acuitto may be deemed to be the beneficial owner of an
aggregate of 1,944 shares of Common Stock, representing approximately .1% of the
issued and outstanding shares of Common Stock of the Issuer, which represents
the right to acquire 1,944 shares of Common Stock issuable upon the exercise and
conversion of the D Preferred Stock and May Warrants underlying the Agents
Warrants (distributed to him by Commonwealth).
(b) Number of shares as to which each such person has:
(1) Sole power to vote or to direct the vote, and sole power to dispose or
direct the disposition of:
Name Number of Shares
---- ----------------
Michael S. Falk 399,108 shares
Robert Priddy 357,144 shares
Keith Rosenbloom 50,756 shares
Basil Ascuitto 1,944 shares
<PAGE>
Page 11 of Pages 14
(2) Shared power to vote or to direct the vote, and shared power to dispose or
direct the disposition of:
(a) Commonwealth, CAMC and Mr. Falk share such voting and disposition
powers with respect to the 295,535 shares of Common Stock that Commonwealth may
acquire.
(b) ComVest and Mr. Falk share such voting and disposition powers with
respect to the 1,484,000 shares of Common Stock that ComVest may acquire.
(c) As more fully described above, the Reporting Persons acquired the D
Preferred Stock, the May Warrants and the Agents Warrants on May 8, 2000. The
Agents Warrants were originally issued to Commonwealth as compensation for
services rendered in connection with the May Placement. Certain of the Agents
Warrants were distributed by Commonwealth to certain of its employees, including
Messrs. Falk, Rosenbloom and Ascuitto. Commonwealth disclaims beneficial
ownership of the Agent Warrants it distributed to other persons, including the
Reporting Persons.
(d) Not applicable.
(e) Not applicable.
Item 6. Contracts Arrangements, Understandings or Relationships with Respect to
Securities of the Issuer.
Each investor who purchased securities in the December Placement and the
May Placement, including Messrs. Priddy, Falk, Rosenbloom and Ascuitto agreed
not to sell, transfer or otherwise dispose of such securities or the Common
Stock issuable upon conversion or exercise of such securities, for one year
following the initial closing of the December Placement and May Placement,
respectively, and thereafter not to sell, transfer or otherwise dispose of more
than 25% of such securities on a cumulative basis during each subsequent 90-day
period thereafter (each such 24- month period referred to as a "Lock-Up
Period"), in each case, without the prior written consent of Commonwealth.
Furthermore, such investors agreed that if the Issuer undertakes a public
offering during the first 12 months of the Lock-Up Periods, they will not sell,
transfer or otherwise dispose of the securities for such period of time after
completion of such offering, not to exceed 12 months, as the managing
underwriter of the offering may request and Commonwealth may agree to.
Item 7. Material to be Filed as Exhibits.
(i) Joint Statement on Schedule 13D, as required by Rule 13d-1(K) under
the Exchange Act.
<PAGE>
Page 12 of Pages 14
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I certify
that the information set forth in this statement is true, complete and correct.
Dated:July 3, 2000 Commonwealth Associates, L.P.
By: Commonwealth Associates
Management Corp., its general partner
By: /s/ Joseph Wynne
-----------------------------------
Name: Joseph Wynne
Title: Chief Financial Officer
Dated:July 3, 2000 Commonwealth Associates Management Corp.
By: /s/ Joseph Wynne
-----------------------------------
Name: Joseph Wynne
Title: Chief Financial Officer
Dated:July 3, 2000 ComVest Capital Partners, LLC
New York, New York
By: /s/ Keith Rosenbloom
----------------------------------
Keith Rosenbloom, Manager
Dated: July 3, 2000 /s/ Michael S. Falk
New York, New York -----------------------------------------
Michael S. Falk
Dated: July 3, 2000 /s/ Robert Priddy
Marietta, Georgia ------------------------------------------
Robert Priddy
<PAGE>
Page 13 of Pages 14
EXHIBIT INDEX
1. Joint Filing of Schedule 13D
<PAGE>
Page 14 of Pages 14
JOINT FILING OF SCHEDULE 13D
The undersigned hereby agree to jointly prepare and file with regulatory
authorities a Schedule 13D and any future amendments thereto reporting each of
the undersigned's ownership of securities of HealthWatch, and hereby affirm that
such Schedule 13D is being filed on behalf of each of the undersigned.
Dated:July 3, 2000 Commonwealth Associates, L.P
By: Commonwealth Associates
Management Corp., its general partner
By: /s/ Joseph Wynne
-----------------------------------
Name: Joseph Wynne
Title: Chief Financial Officer
Dated:July 3, 2000 Commonwealth Associates Management Corp.
By: /s/ Joseph Wynne
-----------------------------------
Name: Joseph Wynne
Title: Chief Financial Officer
Dated:July 3, 2000 ComVest Capital Partners, LLC
New York, New York
By: /s/ Keith Rosenbloom
----------------------------------
Keith Rosenbloom, Manager
Dated: July 3, 2000 /s/ Michael S. Falk
New York, New York --------------------------------------------
Michael S. Falk
Dated: July 3, 2000 /s/ Robert Priddy
Marietta, Georgia --------------------------------------------
Robert Priddy
