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
Date of report (Date of earliest event reported) December 21, 1999
----------------------
Park Pharmacy Corporation
- --------------------------------------------------------------------------------
(Exact Name of Registrant as Specified in Charter)
Colorado 000-15379 841029701
- --------------------------------------------------------------------------------
(State or Other Jurisdiction (Commission (IRS Employer
of Incorporation) File Number) Identification No.)
10711 Preston Road, Suite 250, Dallas, Texas 75230
- --------------------------------------------------------------------------------
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code (214) 692-9921
(Former Name or Former Address, if Changes Since Last Report)
Page 1 of 12
<PAGE>
ITEM 2. Acquisition or Disposition of Assets.
On December 21, 1999, Park Pharmacy Corporation, a Colorado corporation
("Park (CO)"), acquired all of the issued and outstanding stock of Rx-Pro.Com,
Inc., a Texas corporation ("Rx- Pro"). The acquisition was structured as a
merger pursuant to which Rx-Pro was merged with and into Park Pharmacy
Corporation, a Texas corporation and wholly-owned subsidiary of Park (CO) ("Park
(TX)"). Pursuant to the terms of the merger, Park (TX) is the surviving company
in the merger and continues to be a wholly-owned subsidiary of Park (CO) after
the merger. Park (TX) changed its name to "Rx-Pro.Com, Inc." in the merger.
Rx-Pro's shareholders, Messrs. Joe B. Park, R.Ph., Jack R. Munn, R.Ph., and John
A. Blomgren, R.Ph., received an aggregate of 97,500 shares of Series A Preferred
Stock, par value $.001 per share, of Park (CO) in the merger. Each of Messrs.
Park, Munn and Blomgren serves on the Board of Directors of Park (CO). Mr. Park
also serves on the Board of Directors of Park (TX) and is the Chairman of the
Board of both Park (CO) and Park (TX). Mr. Park is currently a controlling
shareholder of Park (CO).
Rx-Pro was formed on March 19, 1999, and is the successor company to
Hospice Pharmacy Alliance LLC, a Texas limited liability company. Rx-Pro
acquired all of the assets and assumed all of the liabilities of Hospice
Pharmacy Alliance LLC in a transaction that closed on April 8, 1999. Rx-Pro
currently operates two on-line pharmacy Web sites, <<www.hospicerx.com>>
(HospiceRx.Com") and <<www.rx-pro.com>> ("Rx-Pro.Com"). Rx-Pro.Com is an
Internet-based information source for health professionals and patients.
Doctors, nurses, pharmacists and other health professionals and institutions can
have partial or full access to Rx-Pro's extensive databases. Complete drug
information including indications, contra-indications and side effects are
available. There is also full and partial patient charting available through
this highly secured web site. Additional information on Rx-Pro.Com and
HospiceRx.Com is available at their Web sites.
ITEM 7. Financial Statements and Exhibits.
(a) Financial Statements of Businesses Acquired.
(1) Balance Sheet of Hospice Pharmacy Alliance LLC as of
December 31, 1998, and December 31, 1997.*
(2) Income Statement of Hospice Pharmacy Alliance LLC for
the years ended December 31, 1998, and December 31,
1997.*
(3) Statement of Cash Flows of Hospice Pharmacy Alliance
LLC for the years ended December 31, 1998, and
December 31, 1997.*
(4) Statement of Comprehensive Income of Hospice Pharmacy
Alliance LLC for the years ended December 31, 1998,
and December 31, 1997.*
(5) Statement of Members' Capital of Hospice Pharmacy
Alliance LLC for the years ended December 31, 1998,
and December 31, 1997.*
Page 2 of 12
<PAGE>
(6) Notes to Financial Statements of Hospice Pharmacy
Alliance LLC for the years ended December 31, 1998,
and December 31, 1997.*
(7) Balance Sheet of Rx-Pro.Com, Inc. as of September 30,
1999.**
(8) Statements of Operations of Rx-Pro.Com, Inc. for the
Nine Months ended September 30, 1999, and September
30, 1998.**
(9) Statements of Cash Flows of Rx-Pro.Com, Inc. for the
Nine Months ended September 30, 1999, and September
30, 1998.**
(10) Note to Financial Statements.**
(b) Pro Forma Financial Information.
(1) Pro forma balance sheet as of September 30, 1999.**
(2) Pro forma Statements of Operations for the year ended
June 30, 1999 and for the Three Months ended
September 30, 1999.**
(c) Exhibits.
(10.1) Agreement and Plan of Merger Among Park (CO), Park
(TX), Rx-Pro and the Selling Shareholders dated as of
December 9, 1999.**
(99.1) Articles of Merger of Park (TX) and Rx-Pro.**
(99.2) Press Release dated January 5, 2000.**
* Incorporated by Reference to that certain Definitive Proxy Statement
filed by the Company with the Securities and Exchange Commission on
September 7, 1999.
** Filed herewith.
Page 3 of 12
<PAGE>
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.
PARK PHARMACY CORPORATION
(Registrant)
Date: January 5, 2000 By: /s/ Gwendolyn Park
-------------------------------------
Gwendolyn Park,
Vice President, Secretary & Treasurer
Page 4 of 12
<PAGE>
RX-PRO.COM, INC.
BALANCE SHEET
SEPTEMBER 30, 1999
(Unaudited)
ASSETS
------
CURRENT ASSETS:
Cash $ 21,868
Accounts receivable 400,574
---------
Total current assets 422,442
PROPERTY AND EQUIPMENT, net of accumulated
depreciation of $5,863 20,705
---------
Total assets $ 443,147
=========
LIABILITIES AND STOCKHOLDERS' DEFICIT
-------------------------------------
CURRENT LIABILITIES:
Accounts payable 411,071
Due to affiliate 117,471
---------
Total current liabilities 528,542
STOCKHOLDERS' DEFICIT:
Common stock 1,000
Paid in capital 28,635
Accumulated deficit (115,030)
---------
Total stockholders' deficit (85,395)
---------
Total liabilities and stockholders' deficit $ 443,147
=========
See accompanying note to these financial statements.
Page 5 of 12
<PAGE>
RX-PRO.COM, INC.
STATEMENTS OF OPERATIONS
(Unaudited)
NINE MONTHS ENDED
SEPTEMBER 30,
----------------------
1999 1998
--------- ---------
SALES $ 123,101 $ 155,971
PROCESSING FEES 13,462 19,022
--------- ---------
Gross profit 109,639 136,949
GENERAL AND ADMINISTRATIVE EXPENSES 224,669 121,399
--------- ---------
NET INCOME (LOSS) $(115,030) $ 15,550
========= =========
See accompanying note to these financial statements.
Page 6 of 12
<PAGE>
<TABLE>
<CAPTION>
RX-PRO.COM, INC.
STATEMENTS OF CASH FLOWS
(Unaudited)
NINE MONTHS ENDED
SEPTEMBER 30,
----------------------
1999 1998
--------- ---------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) $(115,030) $ 15,550
Adjustments to reconcile net income (loss) to net cash used
by operating activities:
Depreciation 1,998 1,998
(Increase) decrease in receivables 79,214 126,542
Increase (decrease) in payables (71,475) (125,694)
--------- ---------
Net cash used by operating activities (105,293) 4,396
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment (17,466) --
CASH FLOWS FROM FINANCING ACTIVITIES:
Capital contributions -- 14,562
Advances from affiliate 107,095 --
--------- ---------
Net cash provided by financing activities 107,095 14,562
--------- ---------
NET INCREASE IN CASH AND CASH EQUIVALENTS 15,664 18,958
CASH AND CASH EQUIVALENTS AT BEGINNING
OF PERIOD 37,532 2,342
--------- ---------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 21,868 $ 21,300
========= =========
</TABLE>
See accompanying note to these financial statements.
Page 7 of 12
<PAGE>
RX-PRO.COM, INC.
NOTE TO FINANCIAL STATEMENTS
1. UNAUDITED INFORMATION
---------------------
The balance sheet as of September 30, 1999 and the statements of operations
and cash flows for the nine month periods ended September 30, 1999 and 1998
were taken from the Company's books and records without audit. However, in
the opinion of management, such information includes all adjustments
(consisting only of normal recurring accruals) which are necessary to
properly reflect the financial position of the Company as of September 30,
1999 and the results of operations and cash flows for the nine months ended
September 30, 1999 and 1998.
Page 8 of 12
<PAGE>
Park Pharmacy Corporation
Unaudited Pro Forma Financial Statements
The accompanying unaudited pro forma financial statements have been prepared to
reflect the acquisition of 100% of the stock of RX Pro.Com by Park Pharmacy
Corporation on December 21, 1999 as if the acquisition had occurred on September
30, 1999 with respect to the pro forma balance sheet and as of the beginning of
the respective periods with respect to the pro forma statements of operations.
Park Pharmacy Corporation acquired RX Pro. Com for 97,500 shares of convertible
preferred stock and the acquisition has been accounted for on the purchase
method of accounting.
The accompanying unaudited pro forma financial statements should be read in
conjunction with the historical financial statements of Park Pharmacy
Corporation and RX Pro.Com, which are included herein or incorporated by
reference. These pro forma financial statements are not indicative of the
financial position or results of operations that would actually have occurred if
the transaction described above had occurred at the dates presented or which may
be obtained in the future.
page 9 of 12
<PAGE>
<TABLE>
<CAPTION>
Park Pharmacy Corporation and RX Pro. Com
Unaudited Pro Forma Balance Sheet
September 30, 1999
Pro Forma Pro Forma
Park RX Pro Adjustments Balances
------------------------------------------------------------
<S> <C> <C> <C> <C>
Current assets - 422,442 422,442
Property and equipment 14,001 20,705 1,000,000 (1) 1,034,706
Goodwill and Other assets 1,212 - 1,240,145 (1) 1,241,357
----------------------------------------- --------------
Total assets 15,213 443,147 2,240,145 2,698,505
========================================= ==============
Currents liabilities 195,191 528,542 723,733
Stockholders equity (deficit) (179,978) (85,395) 2,154,750 (1)
85,395 (1) 1,974,772
----------------------------------------- --------------
Total liabilities and stockholders'
equity 15,213 443,147 2,240,145 2,698,505
========================================= ==============
</TABLE>
Note
(1) Adjustment to record estimated value of stock issued to acquire RX Pro and
remove RX Pro equity. accounts. The purchase price is allocated to the
estimated fair value of the RX Pro assets.
Page 10 of 12
<PAGE>
<TABLE>
<CAPTION>
Park Pharmacy Corporation and RX Pro. Com
Unaudited Pro Forma Statement of Operations
Three Months Ended September 30, 1999
Pro Forma Pro Forma
Park RX Pro Adjustments Balances
--------------------------------------------------------------------
<S> <C> <C> <C> <C>
Sales - 39,691 39,691
Less processing fees - 3,776 3,776
----------------------------------------------- ----------------
Gross profit - 35,915 - 35,915
General and administrative expenses 71,107 70,521 112,007 (1) 253,635
----------------------------------------------- ----------------
Net Loss (71,107) (34,606) (112,007) (217,720)
=============================================== ================
Net loss per share - basic and diluted (0.01) (0.03)
=============== ================
weighted average shares 6,419,000 6,419,000
=============== ================
</TABLE>
Note
(1) Adjustment to reflect amortization of software and goodwill recorded in
acquisition of Rx Pro over five years.
Page 11 of 12
<PAGE>
<TABLE>
<CAPTION>
Park Pharmacy Corporation and RX Pro. Com
Unaudited Pro Forma Statement of Operations
Year Ended June 30, 1999
(1) Pro Forma Pro Forma
Park RX Pro Adjustments Balances
--------------------------------------------------------------------
<S> <C> <C> <C> <C>
Sales - 170,307 170,307
Less processing fees - 20,680 20,680
----------------------------------------------- ----------------
Gross profit - 149,627 - 149,627
General and administrative expenses 105,725 265,130 448,029 (2) 818,884
----------------------------------------------- ----------------
Net Loss (105,725) (115,503) (448,029) (669,257)
=============================================== ================
Net loss per share - basic and diluted (0.02) (0.10)
=============== ================
weighted average shares 6,419,000 6,419,000
=============== ================
</TABLE>
Notes
(1) The RX Pro statement of operations includes the nine months ended
September 30, 1999, with an adjustment to add the three months ended
September 30, 1998 in order to put the statements on a full year basis to
conform with the Park statement of operations.
(2) Adjustment to reflect amortization of software and goodwill recorded in
acquisition of Rx Pro over five years.
Page 12 of 12
AGREEMENT AND PLAN OF MERGER
Among
PARK PHARMACY CORPORATION, a Colorado corporation,
PARK PHARMACY CORPORATION, a Texas corporation,
Rx-PRO.COM, INC., a Texas corporation, and
THE SELLING SHAREHOLDERS IDENTIFIED HEREIN
--------------
Dated as of December 9, 1999
--------------
<PAGE>
AGREEMENT AND PLAN OF MERGER
This Agreement and Plan of Merger (this "Agreement") is entered into as
of December 9, 1999, by and among Park Pharmacy Corporation, a Colorado
corporation ("Parent"), Park Pharmacy Corporation, a Texas corporation and a
wholly-owned subsidiary of Parent ("Merger Sub"), Rx- Pro.Com, Inc., a Texas
corporation (the "Company"), and Joe B. Park, R.Ph., Jack R. Munn, R.Ph., and
John A. Blomgren, R.Ph. (the "Selling Shareholders").
The parties hereto agree as follows:
ARTICLE 1
The Merger; Closing; Effective Time
-----------------------------------
1.1 The Merger. Upon the terms and subject to the conditions set forth
in this Agreement and in accordance with the Texas Business Corporation Act (the
"TBCA"), the Company shall be merged with and into Merger Sub (the "Merger") on
the Closing Date (as herein defined). Following the Merger, Merger Sub shall
continue as the surviving corporation (hereinafter sometimes called the
"Surviving Corporation") and shall continue its corporate existence under the
laws of the State of Texas, and the separate existence of the Company shall
cease. The name of the Surviving Corporation shall be "Park Operating Company."
1.2 Closing. The closing of the Merger (the "Closing") shall take place
at the offices of Carrington, Coleman, Sloman & Blumenthal, L.L.P., 200 Crescent
Court, Suite 1500, Dallas, Texas 75201, at 9:00 a.m., local time, on the date
hereof, or at such other time and place and/or on such other date, as the
parties hereto may agree upon in writing. The date on which the Closing occurs
is hereinafter referred to as the "Closing Date."
1.3 Effective Time. As soon as practicable following the Closing, the
Merger shall be consummated by the filing of articles of merger (the "Articles
of Merger"), in such form as required by, and executed in accordance with, the
relevant provisions of the TBCA, with the Secretary of State of the State of
Texas in accordance with Article 5.04 of the TBCA. The date and time of such
filing is hereinafter referred to as the "Effective Time."
1.4 Effects of the Merger. The Merger shall have the effects set forth
in Article 5.06 of the TBCA.
1.5 Articles of Incorporation. The Articles of Incorporation of Merger
Sub as in effect immediately prior to the Effective Time shall be the Articles
of Incorporation of the Surviving Corporation, except that Article I of the
Articles of Incorporation of the Surviving Corporation shall read as follows:
"The name of the Corporation is Rx-Pro.Com, Inc." until thereafter amended in
accordance with the TBCA.
1.6 Bylaws. The bylaws of Merger Sub, as in effect immediately prior to
the Effective Time, shall be the bylaws of the Surviving Corporation, until
amended as therein provided.
<PAGE>
1.7 Officers and Directors. The officers and directors of Merger Sub
immediately prior to the Effective Time shall be the officers and directors of
the Surviving Corporation, each to hold office in accordance with the Articles
of Incorporation and bylaws of the Surviving Corporation until their successors
have been duly elected and qualified in accordance with the Articles of
Incorporation and bylaws of the Surviving Corporation and the applicable
provisions of the TBCA.
1.8 Subsequent Action. If, at any time after the Effective Time, the
Surviving Corporation shall consider or be advised that any deeds, bills of
sale, assignments, assurances or any other actions or things are necessary or
desirable to vest, perfect or confirm of record or otherwise in the Surviving
Corporation its right, title or interest in, to or under any of the rights,
properties or assets of either of the Company or Merger Sub acquired or to be
acquired by the Surviving Corporation as a result of, or in connection with the
Merger or otherwise to carry out this Agreement, the officers and directors of
the Surviving Corporation shall be authorized to execute and deliver, in the
name and on behalf of each of the Company and Merger Sub or otherwise, all such
deeds, bills of sale, assignments and assurances and to take and do, in the name
and on behalf of each of the Company and Merger Sub or otherwise, all such other
actions and things as may be necessary or desirable to vest, perfect or confirm
any and all right, title and interest in, to and under such rights, properties
or assets in the Surviving Corporation or otherwise to carry out this Agreement.
1.9 Definitions. All financial terms used herein shall have the meanings
ascribed to them in accordance with generally accepted accounting principles
consistently applied ("GAAP"). All terms capitalized herein are defined the
first time they are used, except as otherwise noted.
ARTICLE 2
Effect of the Merger on Capital Stock
-------------------------------------
2.1 Effect on Capital Stock. At the Effective Time, as a result of the
Merger and without any action on the part of the holder of any capital stock of
the Company:
a. Merger Consideration. Each share of Common Stock, par value
$.0001 per share, of the Company (each, a "Share" and collectively, the
"Shares") issued and outstanding immediately prior to the Effective Time (other
than Shares owned by the Company and not held on behalf of third parties
("Excluded Shares")) shall be converted into, and become exchangeable for 3.25
fully paid and nonassessable shares of Series A Preferred Stock, par value $.001
per share (the "Parent Preferred Stock"), of Parent (the "Merger
Consideration"). At the Effective Time, all Shares shall no longer be
outstanding and shall be canceled and retired and shall cease to exist, and each
certificate (a "Certificate") formerly representing any of such Shares (other
than Excluded Shares) shall thereafter represent only the right to receive the
shares of Parent Preferred Stock into which such Shares have been converted.
b. Cancellation of Shares. Each Excluded Share issued and
outstanding immediately prior to the Effective Time shall, by virtue of the
Merger and without any action on the part of the holder thereof, cease to be
- 2 -
<PAGE>
outstanding, shall be canceled and retired without payment of any consideration
therefor and shall cease to exist.
2.2 Closing of the Company's Transfer Books. At the Effective Time, the
stock transfer books of the Company shall be closed and no transfer of Shares
shall thereafter be made.
ARTICLE 3
Representations and Warranties of Parent and Merger Sub
-------------------------------------------------------
Parent and Merger Sub hereby represent and warrant to the Company as
follows (with the understanding that the Company is relying materially on such
representations and warranties in entering into and performing this Agreement):
3.1 Due Organization. Each of Parent and Merger Sub is a corporation,
validly existing and in good standing under the laws of its state of
incorporation, and has full corporate power and authority to enter into and
perform this Agreement and each other instrument, agreement and document to be
executed by it in connection herewith.
3.2 Due Authorization; No Conflicts. Each of Parent and Merger Sub has
full power and authority to execute and deliver, enter into, and approve and
adopt this Agreement and to execute and deliver the Articles of Merger, such
other agreements, instruments and documents to be executed in connection
herewith, and carry out the transactions contemplated hereby. The Boards of
Directors of Parent and Merger Sub have duly and validly taken all action they
are required by law, their Certificate (or Articles) of Incorporation, their
bylaws or otherwise to take to duly authorize the approval, adoption, execution
and delivery of this Agreement and the Articles of Merger, the performance of
their obligations hereunder, and the consummation of the transactions
contemplated hereby. This Agreement has been duly and validly executed and
delivered by Parent and Merger Sub and constitutes a valid and binding
obligation of each of Parent and Merger Sub enforceable in accordance with its
terms, except as the same may be limited by applicable bankruptcy, insolvency,
reorganization or other laws affecting the enforcement of creditors' rights
generally and the application of general principles of equity. The execution,
delivery and performance of this Agreement by Parent or Merger Sub will not (a)
violate any federal, state, county or local law, rule or regulation applicable
to Parent and Merger Sub or (b) violate or conflict with any provision of Parent
or Merger Sub's Certificate (or Articles) of Incorporation or bylaws. No action,
consent or approval of or filing with any federal, state, county or local
governmental authority is required in connection with the execution, delivery or
performance of this Agreement (or any other agreement, instrument or document
executed in connection herewith by Parent and, where applicable, by Merger Sub)
by Parent and Merger Sub, except for the filing of the Articles of Merger to
effect the Merger under the TBCA and relevant authorizations of and required
filings under any applicable state securities laws.
- 3 -
<PAGE>
3.3 Brokers. Neither Parent nor Merger Sub has engaged, or caused to be
incurred any liability to, any finder, broker or sales agent in connection with
the execution, delivery or performance of this Agreement or the transactions
contemplated hereby.
ARTICLE 4
Representations and Warranties of the Company and the Selling Shareholders
--------------------------------------------------------------------------
The Company and the Selling Shareholders hereby represent and warrant to
Parent and Merger Sub as follows (with the understanding that Parent and Merger
Sub are relying materially on such representations and warranties in entering
into and performing this Agreement):
4.1 Capitalization; Ownership of Shares; No Liens on Shares. The
authorized capital stock of the Company consists of 9,000,000 shares of common
stock, $.0001 par value per share, 30,000 of which are issued and outstanding,
and 1,000,000 shares of preferred stock, $.0001 par value per share, none of
which are issued and outstanding. All such issued and outstanding Shares are
duly authorized, validly issued, fully paid and nonassessable. All of the Shares
are owned of record by the Selling Shareholders. None of the Shares were issued
in violation of, or are subject to, any preemptive or preferential rights of any
person. There are no other shares of capital stock of the Company, or securities
convertible into or exchangeable or exercisable for shares of capital stock of
the Company, outstanding, and there are no outstanding options, warrants,
rights, calls, contracts, commitments, understandings, arrangements, or claims
of any character by which the Company is, or may become, bound to issue,
transfer or sell, or repurchase or otherwise acquire or retire, any shares of
capital stock of the Company, or any securities convertible into or exchangeable
or exercisable for, or otherwise evidencing a right to acquire, any such shares.
4.2 Due Organization. The Company is a corporation, validly existing
and in good standing under the laws of the State of Texas and has full power and
authority to carry on its business as now conducted. The Company is qualified to
do business and is in good standing in all jurisdictions where such
qualification is required.
4.3 Subsidiaries. The Company does not directly or indirectly have (or
possess any options or other rights to acquire) any subsidiaries or any direct
or indirect ownership interests in any person, corporation, partnership,
association, joint venture, trust or other entity.
4.4 Due Authorization; No Conflicts.
(a) The Company has full corporate power and authority to
execute and deliver, enter into, and approve and adopt this Agreement
and to execute and deliver the Articles of Merger, to execute and
deliver such other agreements, instruments and documents required to be
executed in connection herewith, and to carry out the transactions
contemplated hereby. The Board of Directors and the shareholders of the
Company have duly and validly taken all action required by law, the
Company's Articles of Incorporation, the Company's bylaws or otherwise
to duly authorize the approval, adoption, execution and delivery of this
- 4 -
<PAGE>
Agreement and the Articles of Merger, the performance of its
obligations hereunder and the consummation of the transactions
contemplated hereby. No other corporate proceeding on the part of the
Company is necessary to authorize this Agreement or to consummate the
transactions so contemplated. This Agreement has been duly and validly
executed and delivered by the Company and constitutes a valid and
binding obligation of the Company enforceable in accordance with its
terms, except as the same may be limited by applicable bankruptcy,
insolvency, reorganization or other laws affecting the enforcement of
creditors' rights generally and the application of general principles
of equity.
(b) The execution, delivery and performance of this Agreement
or the Articles of Merger by the Company, the execution, delivery and
performance by the Company of such other agreements, instruments or
documents required to be executed by it in connection herewith, and the
consummation of the transactions contemplated hereby shall not (i)
violate any federal, state, county or local law, rule or regulation
applicable to the Company or its properties, (ii) violate or conflict
with, or permit the cancellation of, any agreement to which the Company
is a party, or by which it or its properties is bound, or result in the
creation of any lien, security interest, charge or encumbrance upon any
of such properties, (iii) permit the acceleration of the maturity of any
indebtedness of, or indebtedness secured by the property of, the
Company, or (iv) violate or conflict with any provision of the Articles
of Incorporation or bylaws of the Company.
(c) No action, consent or approval of or filing with any
federal, state, county or local governmental authority is required in
connection with the execution, delivery or performance of this Agreement
(or any other agreement, instrument or document executed in connection
herewith by the Company), except for the filing by the Company of the
Articles of Merger with the Secretary of State of Texas and issuance by
such Secretary of State of a certificate of merger in accordance with
Texas law.
4.5 Financial Statements. The following Financial Statements (herein
so called) of the Company have been delivered to Parent by the Company:
(a) Audited balance sheets and related statements of income,
retained earnings, and cash flows of Hospice Alliance as of and for the
years ended December 31, 1997, and December 31, 1998, together with the
notes thereto and the report of Alvin L. Dahl & Associates, PC with
respect thereto (the "Audited Financials").
(b) The unaudited balance sheets and related statements of
income, retained earnings, and cash flows of the Company, as of and for
the six (6) months ended June 30, 1999, and June 30, 1998 (the "Interim
Financial Statements").
The Financial Statements have been prepared in accordance with GAAP. The
Financial Statements present fairly the financial position, results of
operations and changes in financial position of the Company (or Hospice
Alliance, as the case may be) as of the indicated dates and for the indicated
periods except, in the case of the Interim Financial Statements, for the absence
- 5 -
<PAGE>
of notes thereto and subject to normal year-end audit adjustments and accruals
required to be made in the ordinary course of business which are not materially
adverse and are consistent with past practices. Except as set forth in the
Interim Financial Statements, since December 31, 1998, there has been no
material change in the financial position, assets, liabilities, results of
operations, business or prospects of the Company.
4.6 Conduct of Business; Certain Actions. Since June 30, 1999, the
Company has conducted its business and operations in the ordinary course and
consistent with its past practices in all material respects, and there has been
no material adverse change in the financial condition, assets, operation or
business prospects of the Company.
4.7 Proprietary Rights. Schedule 4.7 attached hereto lists all
Proprietary Rights used in or necessary to the business of the Company as now
being conducted (other than for off-the-shelf software programs that have not
been customized for use by the Company). Except as set forth in Schedule 4.7,
the Company owns or has the right to use all material Proprietary Rights
necessary to the conduct of its business as presently conducted. Except as
indicated in Schedule 4.7, (a) the Company owns all right, title, and interest
in and to or a valid and enforceable license or waiver to use all of such
material Proprietary Rights, trade secrets and confidential information and
other proprietary rights, (b) there are no outstanding claims received by the
Company asserting the invalidity, abuse, misuse, or unenforceability of any of
such rights by the Company, and, to the Company's knowledge, there are no
grounds for the same, and (c) to the knowledge of the Company, the conduct of
the Company's business has not infringed any such rights of others. All of the
material patents, trademarks and copyrights owned by the Company have been duly
registered in, filed in or issued by the United States Patent and Trademark
Office or Register of Copyrights or the corresponding offices of other
countries, and have been properly maintained and renewed, consistent with
prudent business practices, in accordance with all applicable provisions of law
and administrative regulations in the United States and each such country. The
term "Proprietary Rights" means any patents, patent applications, patent
disclosures and inventions as well as any reissues, continuations,
continuations-in-part, divisions, extensions or reexaminations thereof;
trademarks, service marks, trade dress, logos, trade names and corporate names,
together with all goodwill associated therewith, copyrights and copyrightable
works; mask works; and registrations, applications and renewals for any of the
foregoing; computer software; and all copies and tangible embodiments of the
foregoing (in whatever form or medium), Internet domain names, service marks,
registered trade names and applications for each of the foregoing, if any,
subject to licenses described herein. [Other Internet Issues].
4.8 Compliance with Laws. The Company has complied in all respects, and
is in compliance in all respects, with all federal, foreign, state, county and
local laws, regulations and orders applicable to its business and has filed with
the proper authorities all statements and reports required by the laws,
regulations and orders to which the Company or any of its properties or
operations are subject. No claim has been made or to the best knowledge of the
Company, threatened by any governmental authority to the effect that the
business conducted by the Company fails to comply, in any respect, with any law,
rule, regulation or ordinance.
- 6 -
<PAGE>
4.9 ERISA Compliance. The Company is in compliance in all material
respects with the currently applicable provisions of The Employee Retirement
Income Security Act of 1974, as amended ("ERISA"), and the applicable provisions
of Section 401(a) of the Internal Revenue Code of 1986, as amended. No employee
benefit plan established or maintained, or to which contributions have been
made, by the Company, which is subject to part 3 of Subtitle B or Title I of
ERISA, had an accumulated funding deficiency (as such term is defined in Section
302 of ERISA) as of the last day of the most recent fiscal year of such plan
ended prior to the date hereof, and no material liability to the Pension Benefit
Guaranty Corporation has been incurred with respect to any such plan by the
Company or any Subsidiary.
4.10 Contracts and Agreements. Attached hereto as Schedule 4.10 is a
list of all material written or oral contracts, commitments, leases and other
agreements (including, without limitation, promissory notes, loan agreements and
other evidences of indebtedness) to which the Company is a party or by which the
Company or its respective properties are bound. Neither the Company nor, to the
best knowledge of the Company, any other party thereto, is in default (and no
event has occurred which, with the passage of time or the giving of notice or
both, would constitute a default) under any such contracts, commitments, leases
or other agreements, and the Company has not waived any right under any such
contracts, commitments, leases or other agreements.
4.11 Claims and Proceedings. Attached hereto as Schedule 4.11 is a list
and description of all investigations known to the Company that are pending or
threatened against the Company or any of its properties or assets, and all
claims, actions, suits, and proceedings pending or, to the best knowledge of the
Company, threatened against the Company or any of its respective properties or
assets, at law or in equity, or before or by any court, municipal or other
governmental department, commission, board, agency or instrumentality. No
inquiry, action or proceeding has been instituted or, to the best knowledge of
the Company, threatened to restrain or prohibit the carrying out of the
transactions contemplated by this Agreement or to challenge the validity of such
transactions or any part thereof or seeking damages on account thereof.
4.12 Taxes. The Company has filed, has caused to be filed or has been
granted an extension by the appropriate government agency of any filing deadline
with respect to, all federal, state and local income tax returns and all other
federal, state and local tax returns which are required to be filed
(collectively "Tax Returns"). All Tax Returns which have been filed have been
prepared in accordance with all applicable laws and regulations, and are true
and accurate in all material respects. The Company has paid or caused to be paid
all taxes shown on all Tax Returns or on any assessment therefor received by the
Company to the extent that such taxes have become due, or has set aside on its
book reserves (segregated to the extent required by GAAP deemed by the Company
adequate with respect thereto. None of the federal income tax returns of the
Company have been audited by the Internal Revenue Service, and neither the state
nor local income tax returns of the Company have been audited by any state or
local tax or revenue agency or authority and the Company has not received notice
of any such proposal or potential tax audit. The Company is not a party to, or
bound by, any tax sharing or allocation agreement or, to the knowledge of the
Company, has any current or potential contractual obligation to indemnify any
other person with respect to any taxes.
- 7 -
<PAGE>
4.13 Bank Accounts. Attached hereto as Schedule 4.13 is a list of all
banks or other financial institutions with which the Company has an account or
maintains a safe deposit box, showing the type and account number of each such
account and safe deposit box and the names of the persons authorized as
signatories thereon or to act or deal in connection therewith.
4.14 Environmental Matters. The Company is not in violation, or alleged
to be in violation, of any judgment, decree, order, law, license, rule or
regulation pertaining to environmental matters, including without limitation,
those arising under the Comprehensive Environmental Response, Compensation and
Liability Act as amended, the Resource Conservation and Recovery Act, as
amended, the Superfund Amendments and Reauthorization Act of 1986, the Federal
Clean Water Act, the Federal Clean Air Act, the Toxic Substances Control Act, or
any federal, state, local or foreign statute, regulation, ordinance, order or
decree relating to health, safety or the environment (collectively
"Environmental Laws"), and the Company has not engaged in any activities that
would give rise to a violation of any judgment, decree, order, law, license,
rule or regulation pertaining to Environmental Laws.
4.15 Brokers. The Company has not engaged, or caused any liability to
be incurred to, any finder, broker or sales agent in connection with the
execution, delivery or performance of this Agreement or the transactions
contemplated hereby.
4.16 Investment Intent. Each of the Selling Shareholders represents,
warrants and acknowledges: (i) that he is acquiring the Parent Preferred Stock
hereunder for his own account for investment and not with a view to, or for sale
or other disposition in connection with, any distribution thereof, nor with any
present intention of selling or otherwise disposing of the same; (ii) that he is
an Accredited Investor (as that term is defined in Rule 501 promulgated by the
Securities and Exchange Commission under the Securities Act of 1933, as amended
(the "Securities Act")); and (iii) that he is fully informed that the shares of
Parent Preferred Stock sold hereunder are being sold pursuant to a private
offering exemption under the Securities Act and are not being registered under
the Securities Act or under the securities or blue sky laws of any state or
foreign jurisdiction, that such shares must be held indefinitely unless they are
subsequently registered under the Securities Act and any applicable state
securities or blue sky laws, or unless an exemption from registration is
available thereunder, and that the Parent has no obligation to register such
shares. Each certificate representing shares of Parent Preferred Stock shall
bear a legend substantially in the following form:
"SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1993, AS AMENDED, AND MAY NOT BE
OFFERED, SOLD OR OTHERWISE TRANSFERRED, PLEDGED OR HYPOTHECATED
UNLESS AND UNTIL SUCH SHARES ARE REGISTERED UNDER SUCH ACT OR AN
OPINION OF COUNSEL SATISFACTORY TO THE COMPANY IS OBTAINED TO THE
EFFECT THAT SUCH REGISTRATION IS NOT REQUIRED."
4.17 Year 2000 Compliance. All hardware and internally developed
software systems and, to the best knowledge of the Company third-party supplied
software, owned or licensed and utilized by the Company in its business are
-8-
<PAGE>
"Year 2000 Compliant", i.e., they shall be capable of performing proper
date-related processing prior to, in or beyond the year 2000, and shall not
cease to operate or operate abnormally or incorrectly as a result of not being
Year 2000 Compliant where such cessation or abnormal or incorrect operating may
have an adverse impact on its operations.
ARTICLE 5
Conditions to Closing
---------------------
5.1 Conditions to Obligations of Parent and Merger Sub. The obligations
of Parent and Merger Sub to consummate the transactions contemplated by this
Agreement are subject to the fulfillment, or written waiver by Parent and Merger
Sub, of each of the following conditions:
(a) The representations and warranties of the Company and the
Selling Shareholders contained in this Agreement shall be true and
correct in all material respects at and as of the Closing Date with the
same effect as though such representations and warranties had been made
on and as of the Closing Date; and Parent and Merger Sub shall have
received an officers' certificate, dated as of the Closing Date, signed
by the President and the Chief Financial Officer of the Company and
certificates signed by each of the Selling Shareholders to the foregoing
effects; and
(b) No action or proceeding shall have been instituted or
threatened for the purpose or with the probable or reasonably likely
effect of enjoining or preventing the consummation of this Agreement or
the Merger or seeking damages on account thereof.
5.2 Conditions to Obligations of the Company. The obligations of the
Company and the Selling Shareholders to consummate the transactions contemplated
by this Agreement are subject to the fulfillment, or written waiver by the
Company, of each of the following conditions.
(a) Parent's and Merger Sub's representations and warranties
contained in this Agreement shall be true and correct in all material
respects at and as of the Closing Date with the same effect as though
such representations and warranties had been made on and as of the
Closing Date; and the Company shall have received a certificate, dated
as of the Closing Date, from each of Parent and Merger Sub, signed by an
authorized representative, respectively, to the foregoing effects; and
(b) No action or proceeding shall have been instituted or
threatened for the purpose or with the probable or reasonably likely
effect of enjoining or preventing the consummation of this Agreement or
seeking damages on account thereof.
- 9 -
<PAGE>
ARTICLE 6
Indemnification
---------------
6.1 Indemnification.
(a) The Selling Shareholders agree to indemnify and hold
harmless Parent and Merger Sub (and, following the Closing, the
Surviving Corporation) and each officer, director, employee,
representative and affiliate of Parent and Merger Sub (and, following
the Closing, the Surviving Corporation) (collectively, the "Parent
Indemnified Parties") from and against any and all damages, losses,
claims, liabilities, demands, charges, suits, penalties, costs and
expenses (including court costs and reasonable attorneys' fees and
expenses incurred in investigating and preparing for any litigation or
proceeding) (collectively, "Indemnifiable Costs") which any of the
Parent Indemnified Parties may sustain, or to which any of the Parent
Indemnified Parties may be subjected, arising directly or indirectly out
of any breach or default by the Company of or under any of its
representations, warranties, covenants, agreements, waivers or other
provisions of this Agreement or any agreement, document or instrument
executed in connection herewith.
(b) Parent agrees to indemnify and hold harmless the Company,
the Selling Shareholders and each representative, officer, director,
employee and affiliate of the Company prior to the Closing
(collectively, the "Company Indemnified Parties") from and against any
and all Indemnifiable Costs which any of the Company Indemnified Parties
may sustain, or to which any of the Company Indemnified Parties may be
subjected, arising out of any breach or default by Parent or Merger Sub
of or under any of its representations, warranties, covenants,
agreements, waivers or other provisions of this Agreement or any
agreement, document or instrument executed in connection herewith.
ARTICLE 7
Miscellaneous
-------------
7.1 Collateral Agreements, Amendments and Waivers. This Agreement
supersedes all prior documents, understandings and agreements, oral or written,
relating to this transaction and constitutes the entire understanding among the
parties with respect to the subject matter hereof. Any modification or amendment
to, or waiver of, any provision of this Agreement (or any document delivered
pursuant to this Agreement unless otherwise expressly provided therein) may be
made only by an instrument in writing executed by the party against whom
enforcement thereof is sought.
- 10 -
<PAGE>
7.2 Successors and Assigns. Parent, Merger Sub and the Company shall not
assign any of their rights or obligations under this Agreement without the
written consent of the other parties hereto. Any assignment in violation of the
foregoing shall be null and void. Subject to the preceding sentences of this
Section 7.2, the provisions of this Agreement (and, unless otherwise expressly
provided therein, of any document delivered pursuant to this Agreement) shall be
binding upon and inure to the benefit of the parties hereto and their respective
heirs, legal representatives, successors and assigns.
7.3 Waiver. No failure or delay on the part of any party in exercising
any right, power or privilege hereunder or under any of the documents delivered
in connection with this Agreement shall operate as a waiver of such right, power
or privilege; nor shall any single or partial exercise of any such right, power
or privilege preclude any other or future exercise thereof or the exercise of
any other right, power or privilege.
7.4 Notices. Any notices required or permitted to be given under this
Agreement (and, unless otherwise expressly provided therein, under any document
delivered pursuant to this Agreement) shall be given in writing and shall be
deemed received (a) when personally delivered to the relevant party at such
party's address as set forth below, (b) if sent by mail (which must be certified
or registered mail, postage prepaid), when received or rejected by the relevant
party at such party's or representative's address indicated below, or (c) if
sent by facsimile transmission, when confirmation of delivery is received by the
sending party:
Parent or
Merger Sub: Park Pharmacy Corporation
10711 Preston Road, Suite 250
Dallas, Texas 75230
With a copy to: Carrington, Coleman, Sloman & Blumenthal, L.L.P.
200 Crescent Court
Suite 1500
Dallas, TX 75201
Attn: John W. Wesley, Esq.
Fax: (214) 855-1333
The Company: Rx-Pro.Com, Inc.
10711 Preston Road, Suite 250
Dallas, Texas 75230
Selling
Shareholders: Joe B. Park, R.Ph.
Jack R. Munn, R.Ph.
John Blomgren, R.Ph.
Each party may change its address for purposes of this Section 7.4 by
proper notice to the other parties.
7.5 Survival of Representations and Warranties. The representations and
warranties of the parties hereto contained in this Agreement or in any
certificate, instrument, or document delivered pursuant hereto shall survive the
Closing, regardless of any investigation made by or on behalf of any party.
- 11 -
<PAGE>
7.6 Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Texas.
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement
in one or more counterparts (all of which shall constitute one and the same
agreement) as of the day and year first above written.
PARENT:
PARK PHARMACY CORPORATION,
a Colorado corporation
By: /s/ Thomas R. Baker
---------------------
Its: President
---------------------
MERGER SUB:
PARK PHARMACY CORPORATION,
a Texas corporation
By: /s/ Thomas R. Baker
---------------------
Its: President
---------------------
- 12 -
<PAGE>
COMPANY:
RX-PRO.COM, INC.
By: /s/ John A. Blomgren, R.Ph.
---------------------------
Its: President
---------------------------
SELLING SHAREHOLDERS
/s/ Joe B. Park
---------------------------
Joe B. Park, R.Ph.
/s/ Jack R. Munn
---------------------------
Jack R. Munn, R.Ph.
/s/ John A. Blomgren
---------------------------
John A. Blomgren, R.Ph.
-13-
ARTICLES OF MERGER OF
PARK PHARMACY CORPORATION, a Texas corporation, AND
RX-PRO.COM, INC., a Texas corporation
The undersigned corporations, acting pursuant to the provisions of
Article 5.01 of the Texas Business Corporation Act (the "TBCA"), hereby adopt
the following Articles of Merger for the purpose of merging Rx-Pro.Com, Inc., a
Texas corporation, with and into Park Pharmacy Corporation, a Texas corporation,
which shall be the surviving corporation (such corporations hereinafter are
collectively referred to as the "Constituent Corporations").
1. The name and jurisdiction of organization of each corporation that
is a party to the Agreement and Plan of Merger are as follows:
Name Jurisdiction
---- ------------
Park Pharmacy Corporation Texas
Park Pharmacy Corporation Colorado
Rx-Pro.Com, Inc. Texas
2. An Agreement and Plan of Merger has been approved and adopted by
each of the Constituent Corporations in accordance with Article
5.03 of the TBCA and is on file at the principal place of business
of Park Pharmacy Corporation, a Texas corporation, the surviving
corporation in the merger, located at 10711 Preston Road, Suite
250, Dallas, Texas 75230.
3. A copy of the Agreement and Plan of Merger will be furnished by
Park Pharmacy Corporation, a Texas corporation, on written request
and without cost to any shareholder of any Constituent Corporation.
4. The number of outstanding shares of each class of stock of each of
the Constituent Corporations is as follows:
Number of
Shares
Corporation Class Outstanding
----------- ----- -----------
Park Pharmacy Corporation Common Stock 7,600,000
Rx-Pro.Com, Inc. Common Stock 30,000
Rx-Pro.Com, Inc. Preferred Stock 0
5. The Agreement and Plan of Merger has been approved by written
consent of the shareholders in lieu of a meeting of each of the
Constituent Corporations.
6. The Agreement and Plan of Merger and the performance of its terms
have been duly authorized by all action of the Constituent
Corporations required by the laws under which they were
incorporated and by their constituent documents.
<PAGE>
7. The Articles of Incorporation of Park Pharmacy Corporation, a
Texas corporation, the surviving corporation in the merger, shall
continue in full force and effect, except that Article I shall be
amended to read in its entirety as follows:
"The name of the Corporation is RX-PRO.COM, INC."
8. Park Pharmacy Corporation, a Texas corporation, as the surviving
corporation in the merger, shall be responsible for the payment of
all fees and franchise taxes of Rx-Pro.Com, Inc., if the same are
not timely paid.
Dated: December 9, 1999
PARK PHARMACY CORPORATION
By: /s/ Thomas R. Baker
----------------------------------
Thomas R. Baker, President and
Chief Executive Officer
RX-PRO.COM, INC.
By: /s/ John A. Blomgren
----------------------------------
John A. Blomgren, R.Ph., President
Exhibit 99.2
PARK PHARMACY ANNOUNCES MERGER OF RX-PRO.COM WITH SUBSIDIARY
DALLAS (January 5, 2000) - Park Pharmacy Corporation, a Colorado
corporation ("Park (CO)") (OTC BB: PPRX), announced today that the merger of
Rx-Pro.Com, Inc., a privately held Texas corporation ("Rx-Pro.Com"), with and
into Park (CO)'s wholly-owned subsidiary, Park Pharmacy Corporation, a Texas
corporation ("Park (TX)"), has been consummated effective December 21, 1999.
Pursuant to the terms of the Agreement and Plan of Merger, Park (TX) is the
surviving company in the merger and continues to be a wholly-owned subsidiary of
Park (CO) after the merger. Park (TX) changed its name to "Rx-Pro.Com, Inc." in
the merger. Rx-Pro.Com's shareholders received an aggregate of 97,500 shares of
Series A Preferred Stock of Park (CO) for their shares of Rx-Pro.Com in the
merger.
Rx-Pro.Com is an Internet-based information source for health
professionals and patients. Doctors, nurses, pharmacists and other health
professionals and institutions can have partial or full access to Rx-Pro's
extensive databases. Complete drug information including indications, contra-
indications and side effects are available. There is also full and partial
patient charting available through this highly secured web site. Additional
information on Rx-Pro.Com and Hospicerx.com is available at www.rx-pro.com.
About Park (CO)
The reverse acquisition of Park (CO) (formerly Power-Cell, Inc.) by the
shareholders of Park (TX) was closed on October 19, 1999. The transaction was
consummated pursuant to a Stock Purchase Agreement dated March 9, 1999, and took
place after the Company's shareholders approved the transaction at a meeting in
Dallas on October 12, 1999. The Company's business plan is to close the
acquisition of Rx-Pro.Com and to acquire independent non-Internet retail
pharmacies.
SAFE HARBOR STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION
REFORM ACT: Statements in this press release that are not historical facts,
including statements about plans and expectations regarding plans and
opportunities, and future financial condition and results are forward-looking.
Forward-looking statements involve risks and uncertainties, which may cause the
Company's actual results in future periods to differ materially and adversely
from those expressed. These uncertainties and risks include competition,
changing consumer preferences, lack of success of new businesses, the inability
to acquire retail pharmacies, and other factors discussed from time to time in
the Company's filings with the Securities and Exchange Commission.
