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SCHEDULE 13E-3
(RULE 13E-100)
Transaction Statement Pursuant to Section 13(e) of the Securities
Exchange Act of 1934 and Rule 13e-3 Thereunder
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
Rule 13e-3 Transaction Statement
(Pursuant to Section 13(e) of the Securities Act of 1934)
(Amendment No. 1)
U.S. DRUG TESTING, INC.
(Name of Issuer)
U.S. ALCOHOL TESTING OF AMERICA, INC.
(Name of Person(s) Filing Statement)
COMMON STOCK, $.01 PAR VALUE
(Title of Class of Securities)
911795102
(CUSIP Number of Class of Securities)
ROBERT STUTMAN
U.S. ALCOHOL TESTING OF AMERICA, INC.
10410 Trademark Street
Rancho Cucamonga, California 91730
(909) 466-8378
(Name, Address and Telephone Number of Person Authorized to
Receive Notices and Communications on Behalf of Person(s) Filing Statement)
This statement is filed in connection with (check the appropriate
box):
a. [ ] The filing of solicitation materials or an information
statement subject to Regulation 14A, Regulation 14C or Rule 13e-3(c) under the
Securities Exchange Act of 1934.
b. [X] The filing of a registration statement under the
Securities Act of 1933.
c. [ ] A tender offer.
d. [ ] None of the above.
Check the following box if the soliciting materials or information
statement referred to in checking box (a) are preliminary copies: [ ]
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Calculation of Filing Fee
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Transaction
Valuation* Amount of Filing Fee
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$11,266,101 $3,884.00
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* The fee was calculated on the basis of an assumed value of
$2.00 (the closing sales price on August 7, 1996) assigned to
a share of the Common Stock of U.S. Drug Testing, Inc. to be
issued in the proposed transaction and it was assumed that an
aggregate of 4,519,988 shares would be issued to the Issuer's
minority stockholders for their 1,721,900 shares and that
393,750 shares would be issued upon the exercise of warrants
at an exercise price of $2.86 per share.
[X] Check box if any part of the fee is offset as provided by Rule
0-11(a)(2) and identify the filing with which the offsetting
fee was previously paid. Identify the previous filing by
registration statement number, or the form or schedule and the
date of its filing.
Amount Previously Paid: $3,884.00
Form or Registration No.: Registration Statement on Form S-4
File No. 333-3923
Filing Party: U.S. Alcohol Testing of America, Inc.
Date Filed: May 6, 1996
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CROSS REFERENCE SHEET
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Schedule 13E-3 Registration Statement
Item Number and Caption Caption
----------------------- ----------------------
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1. Issuer and Class of Security U.S. Drug Market
Subject to the Transaction Information
2. Identity and Background Summary-Background of
Companies; Business of the
Company-General; USAT
Management-Business History
3. Past Contacts, Transactions Material Contacts of USAT With
or Negotiations U.S. Drug
4. Terms of the Transaction Terms of the Transaction;
The Merger and Related Matters
5. Plans or Proposals of the Terms of the Transaction; The
Issuer or Affiliate Merger and Related Matters
6. Source and Amounts of Funds The Merger and Related
or Other Consideration Matters-Fees and Expenses
7. Purposes, Alternatives, Reasons for the Merger and
Reasons and Effects Approval by the USAT Board of Directors
and Certain Tax Consequences under the
caption "The Merger and Related Matters";
Terms of the Transaction-Special Payment
8. Fairness of the Transaction Reasons for the Merger and Approval and
Fairness Opinion under the caption
"The Merger and Related Matters";
Terms of the Transaction-The Consent
Procedure-Statutory Basis
9. Reports, Opinions, Appraisals The Merger and Related
and Certain Negotiations Matters-Fairness Opinion
10. Interest in the Common Stock U.S. Drug Principal
of the Issuer Stockholders
11. Contracts, Arrangements or The Merger and Related
Understandings with Respect Matters-Terms of the Merger
to the Common Stock Agreement
12. Present Intention and Terms of the Transaction-
Recommendation of Certain Consent Procedure-
Persons With Regard to the Miscellaneous
Transaction
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CROSS REFERENCE SHEET
<TABLE>
<CAPTION>
Schedule 13E-3 Registration Statement
Item Number and Caption Caption
----------------------- ----------------------
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13. Other Provisions of the Terms of the Transaction-
Transaction The Consent Procedure; The
Consent Procedure-Rights of
Dissenting U.S. Drug Stockholders
14. Financial Information U.S. Drug's Financial Statements;
Summary Historical and Proforma
Combined Financial Data; U.S. Drug's
Selected Financial Data
15. Persons and Assets Employed, The Merger and Related
Retained or Utilized Matters-Fees and Expenses;
Terms of the Transaction-
Miscellaneous
16. Additional Information Not Applicable
17. Material to be Filed as Appendix A to Consent
Exhibits Solicitation Statement/
Prospectus
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ITEM 1. ISSUER AND CLASS OF SECURITY SUBJECT TO THE TRANSACTION.
(a) This Rule 13e-3 transaction (the "Merger") relates to the common
stock, $.001 par value (the "U.S. Drug Common Stock"), of U.S. Drug Testing,
Inc. ("U.S. Drug"), which has its principal office at 10410 Trademark Street,
Rancho Cucamonga, California 91730.
(b) As of July 31, 1996, there were 5,221,900 shares of the U.S. Drug
Common Stock outstanding, of which 1,721,900 shares were held by stockholders
(the "U.S. Drug Minority Stockholders") other than U.S. Alcohol Testing of
America, Inc. ("USAT"), the reporting person, and, as of July 31, 1996, there
were 77 holders of record of the U.S. Drug Common Stock (including USAT).
(c) USAT, the reporting person with respect to this Schedule 13E-3,
is simultaneously filing an Amendment No. 1 to Registration Statement on Form
S-4, File No. 333-3923 (the "Registration Statement"), under the Securities Act
of 1933, as amended (the "Securities Act"). Information as to the market and
the market prices for the U.S. Drug Common Stock may be found under the caption
"U.S. Drug Market Information- Market Data" in the Consent Solicitation
Statement/Prospectus (the "Prospectus") constituting Part I of the Registration
Statement, which information is incorporated herein by this reference.
(d) U.S. Drug has not declared any dividends on the U.S. Drug Common
Stock to date and, in view of the continuing losses, the Board of Directors of
U.S. Drug has stated that the company has no current intention to pay any such
dividends. USAT is not aware of any restrictions in any agreement or security
which restricts U.S. Drug's present or future ability to pay dividends.
(e) Pursuant to a registration statement under the Securities Act
which became effective on October 5, 1993, U.S. Drug sold 1,721,900 shares of
the U.S. Drug Common Stock to the public at $5.00 per share and netted
approximately $7,099,000 in proceeds.
(f) Not Applicable.
ITEM 2. IDENTITY AND BACKGROUND.
(a)-(d) and (g) Reference is made to the sections "Summary-Background
of Companies" and "Business of the Company-General" in the Prospectus for the
following information relating to USAT, the reporting person: its state of
organization, its principal business and the address of its principal executive
offices, which information is incorporated herein by this reference.
(e) and (f) During the last five years, USAT has not been convicted in
a criminal proceeding and was not a party to a civil proceeding of a judicial
or administrative body of competent
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jurisdiction which resulted in a judgment, decree or final order enjoining
further violations of, or prohibiting activities subject to, federal or state
securities laws or finding any violation of such laws.
For each of the directors and executive officers of USAT, there is
furnished the following information: (a) the reporting person's name; (b) his
or her residence or business address; (c) his or her present principal
occupation or employment and the name, principal business and address of any
corporation or other organization in which such employment or occupation is
conducted; (d) information as to material occupations, positions, offices or
employments during the last five years is incorporated herein by reference to
the section "USAT Management-Business History" in the Prospectus; (e) whether
or not, during the last five years, such person has been convicted in a
criminal proceeding (excluding traffic violations or similar misdemeanors); (f)
whether or not, during the last five years, such director and/or executive
officer was 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 further violations of,
or prohibiting activities subject to, Federal or State securities laws or
finding any violation of such laws; and, if so, identifying and describing such
proceeding and summarizing the terms of such judgment, decree or final order;
and (g) citizenship.
(a) Robert Stutman
(b) 10410 Trademark Street
Rancho Cucamonga, CA 91730
(c) Chairman of the Board and Chief Executive Officer of U.S.
Alcohol Testing of America, Inc. 10410 Trademark Street
Rancho Cucamonga, CA 91730
(d) Reference is made to the section "USAT Management-Business
History" in the Prospectus, which is incorporated herein by
this reference.
(e) No
(f) No
(g) United States
(a) Joseph Bradley
(b) 10410 Trademark Street
Rancho Cucamonga, CA 91730
(c) Treasurer, Acting Chief Financial Officer and Acting Chief
Accounting Officer of U.S. Alcohol Testing of America, Inc.
10410 Trademark Street Rancho Cucamonga, CA 91730
(d) Reference is made to the section "USAT Management-Business
History" in the Prospectus, which is incorporated herein by
this reference.
(e) No
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(f) No
(g) United States
(a) Alan I. Goldman
(b) 28 Highpoint
Cedar Grove, NJ 07009
(c) Self Employed
Investment Banking and Consulting
28 Highpoint
Cedar Grove, NJ 07009
(d) Reference is made to the section "USAT Management-Business
History" in the Prospectus, which is incorporated herein by
this reference.
(e) No
(f) No
(g) United States
(a) John C. Lawn
(b) 389 Beechwood Road
Ridgewood, NJ 07450
(c) Chairman and Chief Executive Officer of
The Century Council
550 South Hope Street, Suite 1950
Los Angeles, CA 90071-2604
(d) Reference is made to the section "USAT Management-Business
History" in the Prospectus, which is incorporated herein by
this reference.
(e) No
(f) No
(g) United States
(a) Peter M. Mark
(b) 5531 Sugar Hill
Houston, TX 77056
(c) Self Employed
Oil and Gas Property Investment
5847 San Felipe, Suite 2930
Houston, TX 77057
(d) Reference is made to the section "USAT Management-Business
History" in the Prospectus, which is incorporated herein by
this reference.
(e) No
(f) No
(g) United States
(a) Linda H. Masterson
(b) 3347 Investment Blvd.
Hayward, CA 94545-3808
(c) Executive Vice President of Cholestech, Inc.; she will become
President and Chief Operating Officer of U.S. Alcohol Testing
of America, Inc. effective May 13, 1996.
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(d) Reference is made to the section "USAT Management-Business
History" in the Prospectus, which is incorporated herein by
this reference.
(e) No
(f) No
(g) United States
(a) Lee S. Rosen
(b) 5200 Tower Center Circle
Boca Center, Suite 207
Boca Raton, FL 33486
(c) Stockbroker
Donald & Co. Securities, Inc.
5200 Tower Center Circle
Boca Center, Suite 207
Boca Raton, FL 33486
(d) Reference is made to the section "USAT Management-Business
History" in the Prospectus, which is incorporated herein by
this reference.
(e) No
(f) No
(g) United States
ITEM 6. SOURCE AND AMOUNTS OF FUNDS OR OTHER CONSIDERATION.
(a) and (b) Reference is made to the section "Fees and Expenses" under
the caption "The Merger and Related Matters" in the Prospectus for information
as to the estimated fees and costs of the Merger and whether such fees and
costs will be paid by USAT or U.S. Drug, which information is incorporated
herein by this reference. USAT does not intend to borrow any funds to
consummate the transaction. U.S. Drug may borrow funds from USAT to pay its
costs and expenses.
(c) and (d) Not applicable.
ITEM 8. FAIRNESS OF THE TRANSACTION.
(a) Reference is made to the section "The Merger and Related
Matters-Reasons for the Merger and Approval" in the Prospectus for information
relating to (i) the reasons why USAT believes the Merger is fair to the U.S.
Drug Minority Stockholders and (ii) the one then director of USAT who initially
abstained, but later indicated she supported the Merger, which information is
incorporated herein by this reference.
(b) See the response to section (a) of this Item 8 to the Schedule
for information as to the material factors which the USAT Board took into
consideration in evaluating the fairness of the Merger, including its
evaluation of current market prices, historical market prices, net book value,
going concern value, liquidation value and the fairness opinion of Whale
Securities Co., Inc. ("Whale Securities"). Reference is also made to the
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section "The Merger and Related Matters-Fairness Opinion" in the Prospectus,
which is incorporated herein by this reference.
There have been no firm offers to date by an unaffiliated person,
other than by USAT, during the preceding 18 months for: (A) the merger or
consolidation of U.S. Drug into or with another entity; (B) the sale or other
transfer of all or any substantial part of the assets of U.S. Drug; or (C)
securities of U.S. Drug which would enable the holder thereof to exercise
control of the issuer. See the section "The Merger and Related Matters-Reasons
for the Merger and Approval "in the Prospectus, which is incorporated herein by
this reference.
(c) Adoption of the Merger Agreement by the requisite consents of the
holders of at least 50% of the shares of the U.S. Drug Common Stock held by the
U.S. Drug Minority Stockholders is required before the Merger can be
consummated. See the section "Terms of the Transaction-The Consent Procedure-
Statutory Basis" in the Prospectus, which is incorporated herein by this
reference.
(d) As indicated in the section "Reasons for the Merger and Approval"
under the caption "The Merger and Related Matters" in the Prospectus, which
information is incorporated herein by this reference, there was no independent
U.S. Drug Board to act on the Merger and, accordingly, the U.S. Drug Board
received an opinion from Whale Securities for the benefit of the U.S. Drug
Minority Stockholders as to the fairness of the Merger to the U.S. Drug
Minority Stockholders from a financial point of view (see Item 9 to this
Schedule). The U.S. Drug Board also authorized, as a condition precedent to
the Merger, that the U.S. Drug Minority Stockholders holding at least 50% of
the non-USAT held shares of the U.S. Drug Common Stock must consent to the
Merger. In addition, the U.S. Drug Board employed independent counsel to
represent U.S. Drug and the U.S. Drug Minority Stockholders.
(e) All directors of U.S. Drug on April 23, 1996 approved the Merger,
three of whom were not employees of U.S. Drug, but were on such date employees
of USAT. Such three directors subsequently resigned and were replaced by three
persons, none of whom is an employee of USAT, two of whom are employees of USAT
and the third is a consultant to the Board of USAT. All three of the new
directors are in favor of the Merger.
ITEM 12. PRESENT INTENTION AND RECOMMENDATION OF CERTAIN PERSONS WITH
REGARD TO THE TRANSACTION.
(a) and (b) Reference is made to the subsection "Miscellaneous" in the
section "The Consent Procedure" under the caption "Terms of the Transaction" in
the Prospectus, which is incorporated herein by this reference.
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ITEM 17. MATERIAL TO BE FILED AS EXHIBITS
(a) Not applicable.
(b) The opinion referred to in Items 8(d) and 9 of this Schedule
is Appendix B to the Prospectus.
(c) The Merger Agreement is Appendix A to the Prospectus and is
incorporated herein by this reference.
(d) The only disclosure document to be furnished to the U.S. Drug
Minority Stockholders is the Prospectus, which is incorporated herein by this
reference.
(e) The disclosure as to the unavailability of appraisal rights is
described in the Prospectus, which is incorporated herein by this reference.
(f) Not Applicable.
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SIGNATURES
After due inquiry and to the best of the undersigned's knowledge and
belief, the undersigned hereby certify that the information set forth in this
statement is true, complete and correct.
August 6, 1996
(Date)
U.S. DRUG TESTING, INC.
By: /s/ Robert Stutman
----------------------------
Robert Stutman, Chairman
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